Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

Oral Answers to Questions — ENVIRONMENT

Council House Building

Mr. Flannery: asked the Secretary of State for the Environment what was the number of council house starts in the years 1978, 1979, 1980, 1981, 1982, 1983 and 1984, respectively.

The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The figures for the first six years are as follows: 75,000, 55,000, 34,000, 21,000, 29,000 and 30,000. The provisional figure for 1984 is 23,000.

Mr. Flannery: Do not those figures reveal a disgraceful position? There are 500,000 building workers out of work, longer and longer waiting lists in all big cities., and houses being sold off at half price, which depletes the urban housing stock, yet the Government produce these figures, which alarm anyone who wishes to house our people. When will the Minister resign?

Sir George Young: I urge the hon. Gentleman to broaden his horizon and consider other indicators of housing performance apart from local authority starts. Local authorities' improvement grants have increased from £90 million to more than £900 million. I suggest that he has a discussion with an Opposition spokesman on housing. The hon. Gentleman implied that he was against the right to buy but, as I understand it, Labour party policy, as announced by the hon. Member for Birmingham, Perry Bar (Mr. Rooker), is to admit that the right to buy has been a success, and that the Labour party would face considerable opposition if it went ba/ck on it.

Mr. Peter Bruinvels: Does my hon. Friend agree that the Labour party is being hypocritical in trying to stop people from buying their homes? That is wholly contrary to the views of the council tenants, who want to buy their homes rather than to see massive additional house building.

Sir George Young: There is clearly a private debate going on within the Labour party about whether to remain committed to repealing the right to buy. As I understood it, the party is against that, but the hon. Member for Sheffield, Hillsborough (Mr. Flannery) does not seem to have been party to that decision.

Mr. Allan Roberts: Will the Minister stop diverting the question away from the abysmal number of local

authority starts by referring to the Government's other so-called initiatives, which have not resulted in anything substantial? Has not he or the Secretary of State, had a word, for example, with Laurie Barratt, and their other friends in the building industry, who say that their well-cherished joint venture scheme will no longer go ahead because of the 15 per cent. VAT on building improvements and the Government's freeze on the right to of local authorities to spend their capital receipts?

Sir George Young: If one looks at the performance of the private sector between 1980 and 1983, one sees that the number of starts increased from 98,000 to 167,000. One must put that in the balance, as well as the factors that the hon. Gentleman mentioned.

Mr. Brandon-Bravo: Are not Opposition Members foolishly playing the numbers game when they concentrate solely on public sector new building? Is it not the case that many authorities—my own in Nottingham is a case in point, with 47,000 homes in its ownership—should be concentrating on maintaining and improving their existing stocks?

Sir George Young: My hon. Friend is right. Whatever the political complexion of local authorities, they have all recognised that the real challenge is to modernise and improve the existing stock and to convert other stock that needs improvement. That has been the thrust of local authority expenditure, and it is wholly misleading to take as the sole criterion of performance, as the hon. Member for Hillsborough did, the number of local authority starts.

Mr. Heffer: Has the Minister had drawn to his attention a report of the commission headed by Prince Philip, which made it clear that those who wanted to rent property were having great difficulty in doing so because of the cuts in capital expenditure determined by the Government?

Sir George Young: I have seen an interim report from that commission containing some evidence. As I understand it, the commission has not yet come to any conclusions. The Government await with great interest the findings of this important commission.

Mr. Robert Atkins: Is it not true that many local authorities choose to direct their housing resources into more productive areas? For example, the borough of South Ribble is the national leader in building sheltered accommodation of a private, housing association or even a council nature. Should not local authorities direct their resources towards that?

Sir George Young: My hon. Friend is right. We have encouraged local authorities to provide housing for the elderly, the disabled and the homeless rather than try to meet the general needs, which we believe the private sector will have a crucial role in satisfying.

Improvement Grants

Mr. Pike: asked the Secretary of State for the Environment what proposals he has for the future of improvement grants.

The Minister for Housing and Construction (Mr. Ian Gow): We intend to issue a consultation document on private sector housing improvement policy, including the future of the home improvement grant system, as soon as possible.

Mr. Pike: Does the Minister recognise the great anxiety caused by the fact that many councils have already stopped giving improvement grants? The Government must produce not only a new policy, but the essential cash for councils to do this work. Will he carry out his earlier promise to the Government and resign if that cash is not forthcoming?

Mr. Gow: Not all that we read in newspapers is true. As to the hon. Gentleman's substantive point, it comes ill from a Labour Member to talk about improvement grants. During the last financial year spending on improvement grants was £900 million, compared with £90 million in the Labour Government's last year of office. In this financial year we expect — we cannot give a final figure — spending on improvement grants to be about £750 million.

Mr. Latham: When the document, which is already rather late, appears, will it address the fact that improvement work is especially labour-intensive—the most labour-intensive in the construction industry—and that it is a cost-effective way of repairing urban decay?

Mr. Gow: I agree with both parts of my hon. Friend's supplementary question.

Mr. Meadowcroft: Is the Minister aware that many unemployed people who own small terraced houses in cities such as Leeds cannot find the capital sums needed to maintain their homes? Is it not within the Government's brand of Conservatism to assist a property-owning democracy? Do they realise that their schemes would become much more favourable if they made more money available for private sector grants?

Mr. Gow: The primary responsibility for maintaining and repairing a home rests with the owner of that home—

Mr. Straw: Is that what the Minister said before the election?

Mr. Gow: I wish that Opposition Front-Bench spokesmen would not shout from a sedentary position, but would listen to the answer. A major part of the review of our home improvement grant policy is that we should achieve a better targeting of available resources. We shall try to ensure that resources from the public sector go to assist those who cannot afford to carry out improvements and repairs, and to the houses in the greatest need of repair.

Mr. Hargreaves: Does my hon. Friend agree that it is hypocritical of Labour Members to condemn the Government's record on improvement grants when one considers that in my constituency in 1978—the last year of the Labour Government—the local authority spent £233,000 on improvement grants, and that this year it is spending £1,800,000? Does my hon. Friend further agree that unless we spend even more we shall end up building more council houses?

Mr. Gow: My hon. Friend's point is a vindication of the Government's policies and an indictment of the policies of their predecessors.

Mr. John Fraser: Will the Minister stop his smug, braggart boasting about the generosity of the election bribe of £900 million, which to many people amounts to little more than telling a man about to be executed that he is having a good breakfast? [Interruption.] It is all very well

for the smug Minister to smirk as well. Does he not realise that 250,000 home owners have had applications for home improvement grants in for over a year, and that his cuts in the housing investment programmes and freezing the use of capital receipts mean that they are still waiting in anxiety and distress and are now unlikely to get their grants? This is an act of treachery by a Tory Government towards many poor and anxious owner-occupiers.

Mr. Gow: Some of that synthetic anger—

Mr. John Fraser: It is not synthetic anger. Come to my advice bureaux.

Mr. Gow: The hon. Gentleman is not the only hon. Member who has advice bureaux. When my right hon. and learned Friend the then Chancellor of the Exchequer introduced the exceptional measures for improvement grants in his Budget of March 1982, he made it clear to the House that it was a temporary measure, partly in response to the 1981 English house condition survey. In fact, the exceptional measures for improvement grants were twice extended beyond the period that my right hon. and learned Friend had originally announced.

Ministry of Agriculture Environment Co-ordination Unit

Mr. Chapman: asked the Secretary of State for the Environment how many officials in his Department are engaged in liaison between his Department and the environment co-ordination unit of the Ministry of Agriculture, Fisheries and Food.

The Secretary of State for the Environment (Mr. Patrick Jenkin): Contacts are numerous and frequent, and no precise figure can be given.

Mr. Chapman: As land use statistics relating to our dramatically changing countryside are collected and assessed by my right hon. Friend's Department rather than by the Ministry of Agriculture, Fisheries and Food, will my right hon. Friend assure the House that there is the closest co-operation between his Department and the recently established environment co-ordination unit of the Ministry of Agriculture, Fisheries and Food? Will he also assure us that the close co-ordination and co-operation will be at ministerial level?

Mr. Jenkin: Happily, I can give my hon. Friend assurances on both those counts. There is increasingly close co-operation and also an exchange of views between the Ministry of Agriculture, Fisheries and Food and my Department, both at official and ministerial level.

Mr. Ron Davis: I remind the Secretary of State that the level of co-operation between his Department and the Ministry of Agriculture, Fisheries and Food has been subject to criticism by the Lords Select Committee, by the Royal Commission tenth report and, most recently, by the House of Commons Select Committee on the Environment. In the light of that, does the right hon. Gentleman not feel the need to introduce a new sense of urgency into his discussions with the Ministry of Agriculture? May we expect a statement or some new policy initiative soon to resolve the undoubted difficulties between the right hon. Gentleman's Department and the Ministry of Agriculture?

Mr. Jenkin: The hon. Gentleman is being a little unfair to both Departments. I am sure that he has noticed a


number of recent conservationist initiatives taken by my right hon. Friend the Minister of Agriculture, Fisheries and Food, including the initiative in Brussels for the new structure directive, the change in the farm grant system to favour conservation, the participation in the new and very welcome experiment in the Broads to preserve the Halvergate Marshes, the reduced levels of financial support for drainage grants, and support for fanning and wildlife advisory groups throughout England. These all represent a considerable shift in emphasis, which I am sure is welcomed on both sides of the House.

Mr. John Mark Taylor: When he turns his mind to matters that have to do with agriculture and with the Department of the Environment, will my right hon. Friend consider the European Community fund for the preservation of the habitat of endangered species? Is the United Kingdom drawing on the fund adequately?

Mr. Jenkin: If my hon. Friend would care to put down a specific question on that point, I should be very happy to give him an answer.

Mr. Denis Howell: Does the Secretary of State agree that the Select Committee report of this House was extremely scathing, but also realistic? Will he acknowledge that since the enactment of the Wildlife and Countryside Act it has been reported that over 156 sites of special scientific interest have been damaged? Do the Government not accept considerable responsibility for that damage? They provided only £600,000 to police the Act in relation to land acquisition and management agreements. Although the Government are to provide £7 million this year, which we acknowledge and appreciate, it shows the degree of ineptitude of the Government. May we have an assurance that the Government will provide sufficient money so that all the responsibilities of the Nature Conservancy Council can be carried out?

Mr. Jenkin: I must ask the House to await the Government's response to what is without doubt an important report by the Select Committee. I thought that the right hon. Gentleman's acknowledgement of the very substantial increase in the funding of the Nature Conservancy Council—an additional £7 million—was singularly churlish. I can tell the right hon. Gentleman that this increae has been very much welcomed by the council.

Planning Laws (Contravention)

Mr. John Hunt: asked the Secretary of State for the Environment if he is satisfied with the enforcement procedures provided by the Town and Country Planning Act 1971 in respect of buildings constructed in contravention of the planning laws and subsequently occupied as a main or only residence; and if he will make a statement.

The Parliamentary Under-Secretary of State for the Environment (Mr. Neil Macfarlane): My right hon. Friend is satisfied with the provisions of section 87 of the Town and Country Planning Act 1971, as amended. If, however, my hon. Friend is aware of any special difficulties, my right hon. Friend will be glad to consider them.

Mr. Hunt: On tht very point, is my hon. Friend aware that a mobile prefabricated home was recently erected on green belt land in my constituency within a few days

without any kind of planning permission and that Bromley council reckons that because of the cumbersome nature of the present planning laws it may take several years for this building to be removed? Is this not an affront to the law-abiding neighbours in that area? Can we not tighten up the law in order to deal more promptly and effectively with those who deliberately flout it in this way?

Mr. Macfarlane: I do not think that either my right hon. Friend The Secretary of State for the Environment or my right hon. Friend the Home Secretary is anxious to return to the conditions that prevailed in the 1960s, which involved the use of magistrates' courts. They would lead to all kinds of problems. The vigilance of the local authority is absolutely critical and vital in all these circumstances, and Bromley has a good record. Its officers know what legal measures are appropriate. I am aware that there have been exceptional delays in some cases, in particular in the case to which my hon. Friend has referred. However, local authorities can take more effective action quickly by prosecuting for failure to obtain the site licence that is required under the Caravan Sites and Control of Development Act 1960. However, we must have a look at these problems, and I shall write to my hon. Friend.

Rural Conservation

Mr. Kenneth Carlisle: asked the Secretary of State for the Environment what recent measures he has taken to conserve the rural environment.

The Parliamentary Under-Secretary of State for the Environment (Mr. William Waldegrave): Our recent agreement to the Broads experimental scheme is a significant step forward both to safeguard the unique landscape and to test the effectiveness of a new means of achieving a viable agriculture in environmentally sensitive areas. We have also just published the Government's response to the Countryside Commission's review of uplands policies.
These decisions follow my right hon. Friend's earlier announcement of substantial increases in grant-in-aid to the commission and the Nature Conservancy Council in 1985–86.

Mr. Carlisle: I am grateful for that reply, but will my hon. Friend emphasise that if we are to conserve wildlife in the wider countryside we need to develop the concept of integrated farming in its practical applications? In this respect I was glad to hear what my hon. Friend said about the Broadlands experimental scheme, but will he press for the extension of this integrated approach to other areas?

Mr. Waldegrave: I am grateful for my hon. Friend's support for the experimental scheme. It has been widely welcomed on both sides of the House and by those who are concerned with the integration of farming and the countryside. Similar schemes are in operation in some of the national parks. This is a major step forward. We all want to learn from it how to go forward in this very sensitive area.

Mr. Chris Smith: In pushing forward his unfortunately inadequate steps to conserve the rural environment, will the Minister be giving wholehearted and full backing to the Bill that is to be introduced on Friday next by my hon. Friend the Member for South Shields (Dr. Clark)?

Mr. Waldegrave: I am sure that the hon. Gentleman is a great expert on these matters. The Government have


done much more than the Labour Government did. It is well known that we welcome the blocking of the three-month loophole, as proposed by the hon. Member for South Shields (Dr. Clark). However, I hope that the hon. Member for South Shields will await my proper response to his Bill when we debate it on Friday.

Mr. Steen: Does my hon. Friend agree that one of the best ways of conserving greenfield sites in the countryside is for the Government to auction off some of the 112,000 acres still on the land register and in public ownership?

Mr. Waldegrave: I think that there is something in what my hon. Friend says, but it does not relate directly to these issues.

Dr. David Clark: Obviously the protection of the rural environment depends essentially on closing the loopholes in the Wildlife and Countryside Act 1981. Will the Minister state whether the Government intend to back the Bill that will be discussed in the House on Friday, which seeks to close those six major loopholes? Will the hon. Gentleman make a clear and unequivocal statement to the House on where the Government stand? We need the answer now.

Mr. Waldegrave: One major loophole is covered in the hon. Gentleman's Bill, and the Government have long made it clear that they welcome its closure. They also welcome the forthright support given by the all-party Select Committee for the Wildlife and Countryside Act, which has been the subject of much rather ill-informed criticism on the part of some Opposition Members, although not the hon. Gentleman.

South-East (Structure Plans)

Mr. Andrew MacKay: asked the Secretary of State for the Environment if he will make a statement on the present progress of structure plans in the south-east.

The Minister for Local Government (Mr. Kenneth Baker): The south-east region comprises Greater London and 12 shire counties. The latter are covered by 17 approved structure plans, most of which are at varying stages of review and alteration. At present I have before me proposals for nine alterations. My hon. Friend will know that Berkshire county council is preparing a single new structure plan to replace the three existing ones for east, west and central Berkshire. A draft for this replacement plan was published last April for public consultation.

Mr. MacKay: Is my right hon. Friend aware that his Department's diktat to Berkshire county council to make provision in its structure plan for central Berkshire for a vast number of new houses to be built is completely opposed by the population of Berkshire for three very good reasons? First, there is not the demand for those houses. Secondly, terrific damage will be done to the environment. Thirdly, employment in the regions concerned and our inner-city policy will be adversely affected.

Mr. Baker: I understand that the county council issued a consultation document containing a figure of nearly 8,000 extra houses, but that it has now issued a further consultation document, and public meetings are being held and public consultation is being carried out about it. I appreciate that there is considerable pressure around

London and in the home counties for new houses, but there is also a strong counter pressure against new large estates. A balance must be struck in such matters.

"Coal and the Environment"

Mr. Dormand: asked the Secretary of State for the Environment if he will make a further statement on the Government's response to the Commission on Energy and the Environment's report, "Coal and the Environment."

Mr. Macfarlane: Progress continues to be made in implementing the commitments given in the Government's response to the commission's report.

Mr. Dormand: Will the Minister give further attention to two aspects that are emphasised in the report? First, renewed efforts should be made with regard to dereliction. However, I immediately recognise the excellent work that has been done under Governments of both parties. Secondly, the despoliation of beaches is as serious now as it was when the report was published in 1981. In coalmining areas beaches provide an important amenity, yet they are an eyesore now as they are covered with coal waste. Will the hon. Gentleman do something about that?

Mr. Macfarlane: We share the hon. Gentleman's anxieties and agree with the strategy that he wants to see implemented. Within the resources available, I can give the hon. Gentleman that full assurance. The Horden pipeline experiment is of great importance but is not at present operating because of the dispute. However, in use it has proved technically very successful. The experimental period is to be extended to allow a full assessment to be made once the dispute is over.

Mr. Forman: When considering the Government's response to the impact of coal on the environment, will my hon. Friend and his ministerial colleagues be prepared to give full weight to the possibility of installing equipment on a pilot basis which might reduce the emissions of acid and other noxious substances from coal-fired power stations?

Mr. Macfarlane: I note my hon. Friend's request. I shall study it and write to him.

Mr. Gareth Wardell: Are the Government satisfied that no longer will opencast coal mine workings be permitted as near to occupied dwellings as 50 yards?

Mr. Macfarlane: We have considered many elements of planning and coal, coal extraction and the general development order. They are all under review and are constantly under discussion, though the role of the local authority is obviously of prime importance. We have made great steps, and I shall look into the point that the hon. Gentleman raises.

Mr. Barron: Will the Minister also look into the cost of the protection of the environment arising from coal mining? Does he think, for example, that the Exchequer might relieve the National Coal Board of some of its costs, so making pits more economic?

Mr. Macfarlane: The hon. Gentleman, representing the part of England that he does, will be pleased to hear that my right hon. Friend has agreed to provide £2·5 million to help finance spoil disposal schemes. A list of possible schemes has now been drawn up and discussions between my Department, the NCB and the local authorities involved are continuing. That is good news.

Borough of Brent (Negotiable Bonds)

Mr. Pavitt: asked the Secretary of State for the Environment why the London borough of Brent has been forbidden to issue negotiable bonds to assist in its financial responsibilities and with the construction of new homes; and if he will make a statement.

Mr. Kenneth Baker: No such instructions have been issued, either by the Government or, I understand, by the Bank of England.

Mr. Pavitt: Does the Minister realise that the fact that the Conservative-controlled London borough of Brent is rate-capped means that, although the instructions have not been issued, there is no way in which negotiable bonds can now be put on the money market to deal with the crisis there of 17,000 on the housing waiting list and £30,000 a week being spent on the homeless? Is he aware that because of that taxpayers and ratepayers will have to pay an extra 0·5 per cent. if, after July, when we reach the top of the reserve list, the London borough of Brent is then able to borrow capital to deal with its problems? Does he realise that, as a result of the situation, taxpayers and ratepayers will have to pay an increased subvention, all because of the way in which the Government are looking after the money market first and homemakers second?

Mr. Baker: The hon. Gentleman has got hold of the wrong end of the stick. The list of authorities wishing to make bond issues is full until the beginning of April, but the Bank of England has accepted bookings for Brent bonds to be issued subsequent to that. The hon. Gentleman rightly says that Brent is under Conservative control. That is why it is one of the rate-capped authorities that will comply with the law. It has already shown the way to many other rate-capped authorities by making savings of up to £20 million without making one person redundant.

Mr. Simon Hughes: rose—

Mr. Speaker: Does the hon. Gentleman's supplementary question relate to Brent?

Mr. Hughes: Yes, Mr. Speaker. As the right hon. Gentleman will be aware, Brent council is a hung council, with the Tories only governing by agreement with the Liberals. Is he aware that the only way in which that authority will be able to meet the rate-capped limit—[Unterruption]—is if the £3 million of housing benefit repayment due is paid into its budget? What does the right hon. Gentleman propose to do to make sure that outstanding repayments of millions of pounds to that and other rate-capped authorities are paid so that they may be able to fix a rate? [Interruption.] May we also have an assurance that the money brokers will not charge extra interest just because they are rate-capped authorities.

Mr. Baker: I am delighted that the Conservative group in Brent has the support of the Liberal group there in implementing economies without Brent having to suffer. That is the policy that has been followed by the authority, which is conducting its affairs in a responsible and sensible way.

Alnwick (Urban Aid)

Mr. Beith: asked the Secretary of State for the Environment why projects in Alnwick are no longer eligible for urban aid.

Sir George Young: Our policy is to concentrate traditional urban programme resources in the more extensively deprived urban areas with 20,000 or more population. Alnwick district has no urban centre of that size.

Mr. Beith: May we be told who dreams up the arbitrary lines and population figures so as to exclude from urban aid places which his officials have hitherto recognised have problems of social deprivation and unemployment just as great as those of areas of larger population? Will the hon. Gentleman recognise, when making future grants, the problems of areas such as Alnwick, whose problems were recognised in the past?

Sir George Young: I understand that even during the time of the Lib-Lab pact Alnwick did not receive any special treatment under the urban programme. The policy, which I am prepared to defend and which I hope the hon. Gentleman will support, is to concentrate the urban programme on areas which suffer from extensive deprivation. Having looked at the statistics for his constituency, I must tell the hon. Gentleman that the needs do not compare with those of other urban areas, where the need is far more extensive. There are small acute pockets of deprivation in Alnwick, but the scale of the problems is such that the local authority should be able to cope with them from its normal resources.

Housing Capital Expenditure

Mr. Alton: asked the Secretary of State for the Environment whether he is satisfied that the amounts allocated to housing capital expenditure in "The Government's Expenditure Plans 1985–86 to 1987–88" will be sufficient to prevent the deterioration of the housing stock.

Sir George Young: The Government's plans allow for over £3 billion of public investment in housing in each of the next three years. It is for local authorities to decide what proportions of their share to use on renovating their stock, on home improvement grants or on other capital expenditure.

Mr. Alton: What advice does the Under-Secretary of State have for authorities such as my own, which have already entered into legal and binding agreements for next year's capital programme and now find that their allocation is insufficient to meet those contracts? What advice does the hon. Gentleman have for authorities which have stopped their housing action area programmes and have put most of their resources elsewhere?

Sir George Young: The message to Liverpool must be that it needs a heavy injection of realism. The council's stated intention for capital expenditure on housing stretches far beyond any reasonable expectation of capital provision. The message to go back to Liverpool is that Liverpool must try to live within its means.

Mr. Yeo: Is my hon. Friend aware that housing expenditure is one of the most labour-intensive forms of any public expenditure? Is he further aware that the reports in today's press of the possibility of further cuts in housing expenditure have given rise to considerable concern?

Sir George Young: There is no foundation for that headline.

Miss Boothroyd: Is the Under-Secretary of State aware that, because of the Government's pernicious financial policies, for the first time in the history of the Black Country towns within Sandwell are unable to build council houses? What message does the hon. Gentleman have for the more than 6,000 families who are on a council waiting list in that area?

Sir George Young: The first message to any local authority must be that it should look at the number of vacant units it already has. Often those units are vacant for more than 12 months. The local authority's first priority must be to get that stock back into use.

Dr. Hampson: Does my hon. Friend agree that we are accustomed to the press selectively quoting from leaked Government documents? Will he go beyond what he said to my hon. Friend the Member for Suffolk, South (Mr. Yeo), because, unless he knocks on the head the impression given in The Guardian today that councils will not be eligible to use their assets, there will be no incentive for councils to sell their assets, which is central Government policy?

Sir George Young: I have seen the article to which my hon. Friend referred. The headline in particular is grossly misleading. No such proposal is on the table.

Mr. Steel: Does not the hon. Gentleman's answer to the questions asked by the hon. Members for Leeds, North-West (Dr. Hampson) and for Suffolk, South (Mr. Yeo) mean that he is denying the figures contained in the reports, which claim to come from his Department, showing that there has been a severe reduction in the number of new starts in house building in the public and private sectors? Is the hon. Gentleman denying those figures?

Sir George Young: When my right hon. Friend the Secretary of State announced on 18 December his proposals for the capital spending in 1985–86 by local authorities, he indicated that the pesent system was unsatisfactory and that he was embarking on discussions with the local authority associations. My right hon. Friend has held a useful meeting with the chairman of the local authority associations. That article arises from a subsequent discussion between my right hon. Friend's officials and officers of the associations.

Mr. Bendall: As the London borough of Redbridge has had its share cut by £7 million, how does my hon. Friend think that Redbridge, with a large number of Airey houses, can repair those units? The cut will seriously delay those repairs.

Sir George Young: I am well aware of the particular problems in Redbridge, where there are a number of Airey houses. I have had a meeting with the chairman of the housing committee. The representations made by my hon. Friend and by the chairman of the housing committee have been taken into account in assessing Redbridge's housing allocation for next year.

Mr. Rooker: I ask the Under-Secretary of State two questions. First, will he answer question No. 12 and say whether the money will prevent a deterioration in the housing stock? Secondly can the hon. Gentleman categorically tell the House whether the proposal announced by the Secretary of State to cut to 20 per cent. the amount that local authorities can use will be the figure

in the order brought before the House, or will the figure be less than 20 per cent., as forecast in The Guardian this morning?

Sir George Young: The figure will be 20 per cent. On the first question, the responsibility for preventing the deterioration of the housing stock has to rest in the first instance with the owner-occupier, who is, in the vast majority of cases, the owner of the stock, rather than the Government.

Council Housing (Privatisation)

Mr. Marlow: asked the Secretary of State for the Environment if he will take action to privatise local authority housing other than through individual sales to sitting tenants or third parties.

Mr. Patrick Jenkin: Private developers have bought, improved, and successfully resold, thousands of derelict and vacant local authority dwellings. Some local authority tenants are taking on the responsibility for running their own estates through management co-operatives. I want to see these welcome trends accelerated.

Mr. Marlow: As it appears that in those countries where rented accommodation is provided by commercial enterprise rather than by a municipal organisation the housing and the environment are better and the cost is somewhat less, will my right hon. Friend consider being more radical in his proposals and require some local authorities to divest themselves of some of their larger and less well-run estates to private enterprise organisations licensed by the Government and operating within certain requirements?

Mr. Jenkin: There are now some 70 schemes of substantial local authority estates or blocks of flats being refurbished and developed in partnership between the public and the private sector. Some of those include tenanted estates. It is encouraging to find that when tenants are offered the chance of and consulted about participating in such ventures they prefer to do that rather than to stay with the local authority. That is something that we are pursuing with considerable energy, because I believe that it is an important development.

Mr. Winnick: Why does the Secretary of State not recognise that hundreds of thousands of people are living in great housing hardship and misery because they cannot be housed by their local authority? Is it not a striking illustration of the Government's callous indifference that they have each year cut the amount of money made available to local authorities? In my borough, only because it has not had the money available, no contracts for new council housing have been entered into for the past six years. When will the Secretary of State recognise his responsibility towards people in such a desperate housing plight in my borough and the rest of the country?

Mr. Jenkin: I am a bit surprised that the hon. Gentleman is not prepared to welcome schemes where private sector money will relieve local authorities of the cost and responsibility of refurbishing some of their most unattractive and difficult to let areas so that the local authorities can concentrate on providing for the needs where the hon. Gentleman has identified. He has a blinkered view of the best way forward in this matter.

Mr. Spencer: Does my right hon. Friend agree that it is only too self-evident from the evidence of Socialist city


councils up and down the country that the vast amounts of money that have been directed into those quarters have not benefited the council tenants, who were meant to be the beneficiaries, and that it is necessary to consider new methods of financing housing for those who cannot afford to pay for it themselves?

Mr. Jenkin: I agree with my hon. and learned Friend. I am prepared to adopt the words of one Labour leader of a council in the north-west, who said the other day:
In many of these great urban estates the public sector has caused the problems, and they will not be solved without the support of the private sector.
I agree with that.

Mr. Cartwright: Does the Secretary of State confirm that the best way to deal with monolithic council estates is not to sell them for private profit but to devolve power to the tenants to enable them to run their own affairs through management and maintenance co-operatives? What practical steps is he taking to encourage local authorities to make progress along those lines?

Mr. Jenkin: I agree with the hon. Gentleman. There is room for a variety of solutions. Some of the tenants' cooperatives that have been developed have been extremely successful. If he consulted his hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton), he would find that it is a matter of great regret that Liverpool city council has cut off tenants' co-operatives from any access to city finance—

Mr. Simon Hughes: Quite right.

Mr. Jenkin: The hon. Member says "Quite right." He should go and talk to the people who are waiting for their houses from those co-operatives.

Mr. Hardy: Does the right hon. Gentleman accept that in many areasa local authorities are not allowed to improve as many houses as they would like, or as their tenants and local ratepayers would like? Is the right hon. Gentleman also aware that in those areas regional and local newspapers are frequently given to criticising councils for their failure to improve as many houses as they would like? Will the right hon. Gentleman make it absolutely clear to the media that councils cannot improve the number of houses that they would like because of Government policy and ministerial action, rather than because of their own decisions?

Mr. Jenkin: If the hon. Gentleman has only just discovered that it is the Government's policy, in pursuit of their general economic initiatives and the control of inflation, to keep a firm control of public spending, I am not quite sure where he has been for the past five years. I would have more sympathy for any council that had gone out of its way to seek private sector partnership to try to resolve some of its problems—[Interruption.] I am glad to hear that the hon. Gentleman's council has done just that. That is the way in which those blocks of flats and estates can be refurbished and developed. There are now examples all over the country which are cheered and applauded by those who live on the estates.

Thames Water Authority

Mr. Sims: asked the Secretary of State for the Environment when he last met the chairman of the Thames water authority; and what subjects were discussed.

Mr. Gow: I met the chairman on 14 January. We discussed several subjects, mainly financial.

Mr. Sims: Can my hon. Friend tell me why he has chosen to ignore the view put forward by the chairman of Thames water authority that the figure that my hon. Friend uses as a reasonable return on assets is hypothetical and unrealistic? Is my hon. Friend seriously asking me to vote this evening in support of orders to limit the extent to which local authorities can increase their rates, and is he asking me tomorrow evening to vote for orders that will place on the Thames water authority the duty to impose a far higher rate than it wishes or needs to impose?

Mr. Gow: The net tangible assets of Thames, as at 31 March 1984 and as certified in the accounts that were signed by the chairman and the director of finance and audited by Arthur Andersen, are £4,425 million. I understand the views expressed by my hon. Friend. He is correct in that, to my regret, there is no agreement between the chairman of Thames and myself about the basis on which a proper return on investment is required. Nevertheless, it is true that for the current financial year the rate of return required by Thames is 0·5 per cent., which is the lowest target for any water authority, and for the coming year the target set for Thames is 1·37 per cent., which is still the lowest target for any of the 10 water authorities.

Mr. Pavitt: Will the Minister convey to the chairman of Thames water authority the admiration of many hon. Members on both sides of the House for the way in which he has resisted the Government's attempt for the first time, to make water a taxable commodity? Will the Minister convey our thanks to the chairman for standing up to the Government in the vigorous way that he has already done?

Mr. Gow: We are setting higher targets for the water industry as a whole, including Thames. I should like to join the hon. Gentleman in paying a tribute to Mr. Roy Watts — [Interruption.] Oh yes. The chairman of Thames water authority is fully aware of the fact that he was chosen by my right hon. Friend the Secretary of State to be chairman of Thames because he had the qualities that were required of the chairman. I pay tribute to what he has achieved. The dispute is about the rate of return that should be required on a current cost accounting basis.

Mr. Jessel: Will my hon. Friend please explain why any financial return on capital is needed at all for this public utility operating in a monopoly beyond what is required for current outgoings, for provision for future construction and repair and for repayment of debt over a reasonable period, such as eight or 10 years?

Mr. Gow: Because it is the Government's policy that assets in the public sector should earn a proper rate of return. In that respect we are following precisely the principles that were laid down by the Labour Government in their White Paper in 1978.

Mr. Eggar: When my hon. Friend met the chairman of the Thames water authority, did he discuss the denationalisation of that body? Is he aware that the board is in favour of such a course of action? Could he not agree with the chairman of the board on that objective at least?

Mr. Gow: I did not discuss that possibility with the chairman of Thames Water Authority on the occasion to


which the question relates. My hon. Friend will be aware of a reply that was given last week by my right hon. Friend the Prime Minister to a question on this subject.

Dr. Cunningham: Is the Minister aware that we welcome his confirmation that Mr. Roy Watts has not only acted with courage but within his terms of reference, unlike the hon. Gentleman, who seems to be doing everything possible to exceed his in leaning on the chairman, second-guessing him, overruling him and imposing a tax on water consumers in the Thames area? Will the hon. Gentleman confirm that, by normal accounting methods, Thames Water is the seventh most profitable business in Britain? Will he also confirm that the current cost accounting methods he is seeking to impose are not widely employed in business in Britain and amount to an imposition by the Government of a naked tax on water consumers?

Mr. Gow: It is strange that there should be this conversion of the hon. Gentleman. The orders that will be debated tomorrow evening are the fourth and fifth orders that have been laid before the House. The first three orders, which were made under section 29 of the Water Act 1973 and which were calculated on exactly the same basis of current cost accounting, were not opposed by the Labour party. I remind the House of the conclusions reached by Price Waterhouse and Co. in its report in 1981 on the principle of current cost accounting. It said:
The approach to current cost accounting, which has been adopted by the water authorities, is both soundly based and sensible.

Domestic Rates

Mr. Proctor: asked the Secretary of State for the Environment what representations he has received from ratepayers concerning the likely level of rates for 1985–86; and if he will make a statement.

Mr. Kenneth Baker: I have received a variety of representations. If authorities budget to spend at target the average increase in rates should be in low single figures.

Mr. Proctor: Does my right hon. Friend agree that high rates are inimical to job creation and that there is much support for the Government's rate-capping proposals in areas such as Basildon, which is spending £600,000 on housing administration, and Lewisham, which has just commissioned a report that will cost the ratepayers of Lewisham about £5,000, into the psychological impact of golliwogs on children in Lewisham?

Mr. Baker: My hon. Friend has to suffer under the district council of Basildon, which is living in an unreal world, having increased its planned spending last year by 20 per cent. Undoubtedly, the ratepayers of Basildon will be helped considerably by the rate-capping that we are introducing this year.

Mr. Fatchett: rose—

Mr. Boyes: Does the Minister agree that the natural solution to the level of rates is to let those who have to pay them speak through the ballot box? Through various measures, such as the abolition of the GLC and metropolitan councils, and now rate-capping, the Government seem to think that democracy can be thrown out of the window at their whim. They will suffer as a consequence of that in future.

Mr. Baker: Only 18 out of the 413 local authorities will be rate-capped this year. This means that some 390 will be living within the system. Some of those authorities will be allowed—and are already predicting—very large rate increases. For example, Liverpool city council, which is not rate-capped this year, is predicting a very substantial rate increase. We feel that the Government share the responsibility for protecting ratepayers in the hard-pressed areas.

Mr. Forth: Could not my right hon. Friend hold out hope for hard-pressed ratepayers, and avoid the necessity for future rate capping, by bringing forward proposals to reform local Government finances in such a way as to reestablish the connection between voting and paying tax, the lack of which is one of the main reasons for the current problems in local government?

Mr. Baker: My hon. Friend is absolutely right. The link between the rate demand and the ballot box has grown very thin in many areas. This is one of the many matters that I am considering in my review of local government. I hope that it will be possible to bring forward proposals later this year for public discussion.

Mr. Loyden: Does the Minister not understand that at a time of mass unemployment, when thousands of people are awaiting housing, and when, in many towns and cities, there is an aging population, local authorities need not less but more finance to provide for those problems, which have been directly caused by the present Government?

Mr. Baker: The hon. Gentleman represents part of the city of Liverpool. His city council is making such demands upon the national Exchequer that no Government could possibly meet them. I hope that that will not result in a grave crisis in the city of Liverpool later in the year. If the hon. Gentleman wishes to help to solve the housing crisis in Liverpool, he should persuade the city council to end its policy of buying co-operatives and instead to encourage co-operative housing development, which is what many of the people of Liverpool want.

Mr. Peter Bruinvels: In Leicester, which is to be rate-capped, I have received fewer than 12 letters expressing opposition to rate capping and more than 150 expressing approval of it. Will my right hon. Friend assure his Department that the majority in Leicester believe that rate capping is important for the future of the city?

Mr. Baker: I thank my hon. Friend for his robust defence of Government policy.

Mr. Speaker: I must correct a wrong. I call Mr. Fatchett.

Mr. Fatchett: I am most grateful to you, Mr. Speaker. Despite the embarrassment that you caused my hon. Friend the Member for Houghton and Washington (Mr. Boyes), I thought that he did very well with his question.
Is not the reality that the Minister has had to introduce rate capping because the Government have totally failed to honour their commitment in relation to local government expenditure? They have failed to abolish rates. They have lifted the burden of local authority expenditure away from the taxpayer and on to the individual ratepayer. Rather than helping the ratepayer, the Government have made themselves the enemy of the ratepayer by ensuring that they are paying more for less in terms of services.

Mr. Baker: Since 1979 we have succeeded in restraining the rate of growth in local government expenditure to 1 per cent. a year in real terms. In the 1960s and 1970s there was growth of about 3 per cent. a year in real terms. The 18 rate-capped authorities together account for excess spending this year of £550 million.

Mr. Straw: When Mr. John Clout, the leader of Conservative-controlled North Yorkshire county council, complained last month that of the 8·6 per cent. increase in the rates more than half was due to cuts in central Government grants, was he telling the truth?

Mr. Baker: Speaking from memory, I believe that in North Yorkshire there was an increase in grant this year. Several shire counties have suffered a reduction in grant this year, including my own county of Surrey, which has just announced a rate increase of 4·9 per cent.

Water Authorities

Mr. Hicks: asked the Secretary of State for the Environment what has been the response of water authorities to the Government's decision to revise their financial targets in 1985–86; and if he will make a statement.

Mr. Gow: Mixed. If I should catch your eye tomorrow, Mr. Speaker, I hope to make a statement then.

Mr. Hicks: Can my hon. Friend explain the logic of the Government pursuing a strict anti-inflation policy and then deliberately imposing an increased scale of water charges on business and domestic consumers?

Mr. Gow: I understand my hon. Friend's point, but it is Government policy that a proper rate of return should be earned by assets in the public sector. As to the effect of inflation, a 1 per cent. increase in water charges would add one hundredth of 1 per cent. to the retail prices index. Mercifully, charges for water are a modest part of

household budgets. Moreover, water charges are taken fully into account when calculating supplementary benefit, and 3 million households receive help in that way.

Mr. Harris: Will my hon. Friend think again, even at this late stage, as many of us do not see the logic of the Government's policy? What is more, many people outside will be angry when they receive their water rate bills in a couple of weeks' time.

Mr. Gow: I shall do my utmost to persuade my hon. Friend in the debate tomorrow.

Mr. Bermingham: Will the Minister come clean either now or tomorrow and admit that the Government are imposing a tax on users of water, whether private or industrial? There is a tax on gas and electricity for the benefit of the Government's coffers, and water authorities are now being used in exactly the same way.

Mr. Gow: I do not agree that the Government are imposing a tax on water. We are requiring a higher rate of return on assets owned by water authorities. A consequence of that higher rate of return will be higher investment and a reduction in borrowing. The latter is a central purpose of the Government's economic policy.

Several Hon. Members: rose—

Mr. Speaker: Order. We must move on, but in the debate tomorrow I shall bear in mind those hon. Members who wished to get in on this important question.

Mr. Winnick: On a point of order, Mr. Speaker.

Mr. Speaker: Order. Does the point of order arise out of questions?

Mr. Winnick: I cannot pretend that it does. If you cannot accept it now, Mr. Speaker, may I give notice that I intend to raise a point of order with you at the first opportunity?

Gibraltar

The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, Mr. Speaker, I wish to make a statement about the outcome of my meeting yesterday in Geneva with the Spanish Foreign Minister, Sr. Moran, about Gibraltar.
As I foreshadowed in my statement to the House on 28 November, our meeting marked the start of the restoration, after an interval of 15 years, of direct communications and the free movement of persons, vehicles and goods between Gibraltar and Spain. We have also started the negotiations that were envisaged by the Lisbon statement of April 1980. They are aimed at overcoming all of the differences between us on Gibraltar and at promoting co-operation between Gibraltar and Spain on a wide range of matters. In addition, Spaniards in Gibraltar and Gibraltarians in Spain will enjoy European Community rights in advance of Spanish accession to the Community.
Spanish, British and Gibraltarian officials will now meet to deal with several specific areas for practical cooperation. They include aviation, tourism and economic and cultural matters. The first such meeting begins this month. Mr. Moran specifically reaffirmed to me the undertaking set out in the Brussels communiqué that the Spanish Government will take the early actions necessary to allow safe and effective air communications in the region. Specific ideas for this are now under consideration.
Mr. Moran raised the subject of sovereignty at our meeting. He was entitled to do so under the terms of the Lisbon and Brussels statements. He also outlined informally to me some ideas on the subject and said that he will later make formal proposals. However, Mr. Moran underlined the importance that he attaches to the interests and feelings of the Gibraltar people when dealing with this issue. For my part, I made clear that the British Government's commitment to honour the freely and democratically expressed wishes of the Gibraltarian people, which is plainly set out in the preamble to the Gibraltar constitution, stands unchanged.
Sir Joshua Hassan, who has led his people so resolutely over many years of difficulty, participated at my side yesterday as a member of the British delegation. He subsequently described the meeting in Geneva as positive and constructive in every way, and expressed himself fully satisfied that the results are good for Gibraltar. I greatly valued his wise advice. I am sure that the whole House will join me in paying tribute to his courage, steadfastness and statesmanship.
The task ahead is to see that practical co-operation between Gibraltar and Spain develops in a way which will benefit both peoples and that Spain and the United Kingdom continue to manage our differences as befits friends and allies.
In conclusion, I should like to make quite clear to the House that this result is good for Britain, good for Spain and, above all, good for the people of Gibraltar whose wishes we are pledged to respect.

Mr. Denis Healey: I welcome the statement of the Foreign Secretary and the fact that the frontier is now open. I think that hon. Members on both sides of the House will feel that it is important that the

increase in contacts at the human level between Gibraltar and Spain and the close economic and cultural links which the Foreign Secretary foreshadowed should be able to reduce the fears and suspicions which have long tormented relations on both sides.
I am glad that the Foreign Secretary was able to tell us that Sr. Moran recognises the importance of the feelings and interests of the people of Gibraltar on this matter and has therefore made no formal approach on the question of sovereignty at this stage. He must recognise that there is widespread opposition on the rock, and there would be increased opposition if there were any pressure from the Spanish side for early negotiations on this matter. I hope that the Spanish Government also will consider the implications for any negotiations on the rock with regard to their own position in the Moroccan enclaves across the straits.
Nevertheless, I hope that all hon. Members will recognise that the existence of a strong democratic regime in Spain after so many years — a regime which, moreover, will join Britain in the Community in the very near future — increases the importance of developing links at every level between Gibraltar and Spain.
May I ask the Foreign Secretary two specific questions? First, can he tell us yet which civil servant will be responsible for pursuing the course which he has described to us this afternoon? Secondly, has the Prime Minister now any plans for visiting Madrid? The Foreign Secretary will be aware that she is the only Prime Minister of a community country who has not yet visited the capital of Spain.

Mr. Dennis Skinner: She has been everywhere else.

Mr. Healey: I must confess to my hon. Friend that my suggestion was not wholly without concern for assuring that there is no disagreement between the Prime Minister and the Foreign Secretary on this matter as so unfortunately occurred during the negotiations on Hong Kong.
Finally, I hope that the precedent of better relations with Spain will be followed by seeking better relations with another democratic regime in another hispanic country which also maintains historic claims to sovereignty over a British colony.

Sir Geoffrey Howe: I thank the right hon. Gentleman for his opening remarks. There is no parallel between the case of Gibraltar and that of the Falkland Islands. They are historically, legally and constitutionally quite different. Perhaps the most important difference is that Spain recognises the validity of our title under the treaty of Utrecht whereas Argentina refuses to acknowledge our sovereignty over the Falkland Islands. Spain's attitude to the rights of the inhabitants of Gibraltar is also markedly different. Spain is an ally in NATO and a prospective partner in the European Community and has publicly stated that it intends to pursue its claim by peaceful means. The right hon. Gentleman will appreciate that that is in total contrast with the historical, geographical and constitutional position of the Falkland Islands. Our position in relation to the Falkland Islands remains unchanged.
The discussions between Spain and the United Kingdom will be monitored by civil servants on both sides at suitably senior level, subject to my direction on behalf of the Government.
As for possible visits, at this stage I say only that the agreement reached in Brussels and its implementation from yesterday plainly opens up prospects of visits far more clearly than has been the case thus far.

Sir Peter Blaker: I congratulate my right hon. and learned Friend on the part that he has played in ensuring that the border was finally opened. We hope that tourism will benefit from that, but does he agree that the main economic enterprise in Gibraltar remains the dockyard? Does he agree that it would be most helpful to good relations between Spain and Gibraltar if the Spaniards sent some ships to that yard for repair?

Sir Geoffrey Howe: I am grateful to my right hon. Friend for his congratulations. He was right to draw attention to tourism as being perhaps the most important component of economic growth in and around Gibraltar. Nevertheless, the dockyard remains important. I am glad to be able to tell the House that in the first nearly two months of its existence as a commercial yard it has got off to a very good start, that 500 people are now employed there and that the management expects a substantial increase in that number in the months ahead. A significant number of craft have passed through the yard. I am sure that the Spanish Government and, perhaps more important, Spanish commercial interests will appreciate the importance of the point made by my right hon. Friend.

Mr. Russell Johnston: I congratulate the Foreign Secretary on a well balanced and fair statement which safeguards the democratic wishes of Gibraltarians and paves the way for better relations with Spain. So why is Mr. Joe Bossano getting so excited?

Sir Geoffrey Howe: I am grateful to the hon. Gentleman for his congratulations. As he will know, there are circumstances in which Opposition parties do not always take the same view as the Government of the day. I believe that the developments likely to take place in Gibraltar in the months and years ahead are likely to be seen as so much to the advantage of the people of Gibraltar that the understandable anxiety that now exists in Gibraltar—I seek in no way to diminish its significance—will respond to the practical consequences of the steps that we have taken.

Mr. Michael Latham: I welcome my right hon. and learned Friend's achievement and that of Sir Joshua Hassan. In telling the Department that the Government stand firm on the commitment to the Gibraltar constitution, will my right hon. and learned Friend stress that in no circumstances will the House of Commons permit any retreat from that position?

Sir Geoffrey Howe: I have made it quite plain, not just in the Department where it has always been abundantly plain but to the Spanish Foreign Minister and the people of Gibraltar throughout the negotiations, that the commitment set out in the Gibraltar constitution stands without qualification and is of the utmost importance. One of the most important features of the negotiations has been the extent to which that has been wisely and practically acknowledged by Spanish Government spokesmen.

Mr. Tom Clarke: Does the Foreign Secretary agree that on an important constitutional matter the view of every opposition is important? In view of the narrow margin between the parties in Gibraltar, what consideration was given to the views of Mr. Joe Bossano?

Sir Geoffrey Howe: I agree that one should not disregard the view of any opposition in a parliamentary democracy. When one discusses a matter of such importance with a democratically based community such as Gibraltar, it is right to pay attention to the views expressed by the democratically elected Chief Minister. He offered wide and sustained advice throughout the matter, and has been responsible for carrying through the Gibraltar legislature the necessary measures, which he has done. That is the right way to handle such an issue. I am grateful for the support and advice that I have received from Sir Joshua Hassan.

Sir Antony Buck: Is my right hon. and learned Friend aware that most Conservative Members will wish to congratulate him on what has been achieved and, even more, on the responsible attitude adopted by Sir Joshua Hassan and many people in Gibraltar. Will my right hon. and learned Friend say a word about the defence implications of the agreement, and confirm that Gibraltar will continue under the new set-up to be an important factor in our defence of that part of the Mediterranean?

Sir Geoffrey Howe: I am grateful to my hon. and learned Friend for his opening remarks and endorse what he said about Sir Joshua Hassan. The defence component of Gibraltar remains important. One of the points touched on in the Brussels communiqué was the possibility of discussions on military matters with the Spanish Government. That has not arisen yet, and a number of other questions in the NATO context do not arise in the present circumstances.

Mr. John David Taylor: Although most hon. Members will welcome the Government's position, which honours the freely and democratically expressed wishes of the Gibraltarians, they must be worried that in the statement the Secretary of State made a distinction between our Government's position and the position of the Spanish Foreign Minister. Will he explain further the distinction that he made when he went out of his way to say that the Spanish Government simply and merely attaches importance to the interests and feelings of the Gibraltar people? That is certainly not recognising their democratic rights.

Sir Geoffrey Howe: It is right to acknowledge the extent to which the Spanish Government, founded, as the right hon. Member for Leeds, East (Mr. Healey) pointed out, on the basis of a democratic constitution, and democratically elected, recognise the importance of Gibraltar's democratic institutions. Some time ago, Sr Moran observed:
If they gave me Gibraltar on a plate against the will of the Gibraltarians it would not be a good deal for Spain.
That is an important recognition of the importance of the wishes and interests of the Gibraltarians. I take the opportunity of paying tribute to Sr Moran's contribution to the negotiations. I repeat that our commitment as set out in the 1969 constitution stands unqualified.

Mr. Nicholas Soames: Clearly the House will wish to congratulate my right hon. and learned Friend


and Sr Moran on the positive way in which the talks have begun. Does my right hon. and learned Friend agree that clearing the air on this matter will facilitate Spain's entry into the European Community, and also enable it to continue its membership of NATO?

Sir Geoffrey Howe: I am grateful for my hon. Friend's opening remarks. We attach importance to Spain's continued membership of NATO and its accession to the Community. I hope that the agreements that we reached on this matter will help to sustain both those things. It was also important for us to reach a conclusion on these matters bilaterally between our two countries to establish a cooperative atmosphere and to make it plain that it was not in any sense being agreed upon in the course of securing agreement to Spain's entry to the Community.

Mr. Eric S. Heifer: Does the Foreign Secretary agree that congratulations are due both to him and, more important, to the democratic Government in Spain who have acted intelligently throughout the discussions? Is it not clear that in the long run the question of sovereignty must be settled through negotiations with Spain? Is it not also clear that Joe Bossano has much in common with Felipe Gonzalez if we could only get the two people together and discuss the matter in such a way that Gibraltar could be considered as part of the new approach of the Spanish Government towards devolved government in Spain, which is in line with their Socialist policies?

Sir Geoffrey Howe: I repeat my tribute to the way in which the Spanish Government, democratically elected as they are, have approached this matter. The fact that the border is now open, and that there is an atmosphere in which good contacts and personal and social relationships are likely to be established, may lead to all sorts of changes of mind on both sides of the border. I cannot predict what course those will take, save to reaffirm our commitment to the wishes of the Gibraltar people as set out in the 1969 constitution.

Mr. John Stokes: My right hon. and learned Friend will know how much I admire his efforts as Foreign Secretary, and how much I oppose the ignorant attacks on the Foreign Office. But ordinary people are puzzled by the talks with Spain about Gibraltar. They say, "If we have no intention of surrendering the sovereignty of Gibraltar to Spain, why have the talks at all?"

Sir Geoffrey Howe: I am grateful to my hon. Friend. The answer to his question is that the sovereignty of Gibraltar has been at issue between the Spanish and British Governments for many years. It has overshadowed and made much more difficult the conduct of relations between those Governments. It has created conditions that have made the prospect of social and economic prosperity for Gibraltar much more difficult. The agreement that we have reached is that the topic can be discussed by the two Governments on the firm basis that I have outlined of our continued commitment to respect the wishes of the Gibraltar people. From that can flow nothing but advantage. As I said in my opening statement, it is a good agreement for Britain, for Spain and for the people of Gibraltar.

Mr. Tam Dalyell: With regard to the Foreign Secretary's reply to my right hon. Friend the Member for Leeds, East (Mr. Healey) on the historical differences between Gibraltar and the Falklands, does the Foreign Secretary accept that he is making a serious criticism of his hon. Friends and mine on the Select Committee on Foreign Affairs, who expressed the gravest doubts about the legal and historical background? Does he dismiss the Select Committee? What is his attitude to it?

Sir Geoffrey Howe: The hon. Gentleman will have many opportunities to discuss the Falkland Islands, but that subject does not arise from this statement. It would be wrong for me to swap views with the hon. Gentleman now. I raised the subject in answer to a question from the right hon. Member for Leeds, East (Mr. Healey). I answered his question by saying that the two matters are completely different.

Mr. Andrew MacKay: Does my right hon. and learned Friend realise that his statement today, together with his efforts and those of Sr Moran and Sir Joshua Hassan, will be broadly supported by the great majority of hon. Members? Will he confirm that top of the agenda for the talks will be allowing more flights into Gibraltar as soon as possible.

Sir Geoffrey Howe: I am grateful for my hon. Friend's opening remarks. As I said in my statement, and as was set out in the Brussels agreement, the Spanish Government reaffirm their commitment to take the early action necessary to ensure the safe and effective use of airspace in the region.

Mr. David Young: Honourable Members on both sides of the House will be grateful if we can reconcile the three conflicting points of view. Before we sink into a swamp of self-congratulation, may I point out that many Gibraltarians believe that they are being sold out the back door economically, if not politically? What will the Foreign Secretary do to consult the official Opposition on this matter? Does he recognise that Spain is again playing on the fact that Gibraltar is still a colony? Would not one of the options be to offer self-government if the aspirations of the Gibraltar people were not satisfied?

Sir Geoffrey Howe: As to consultation with the Opposition, the hon. Gentleman will have noticed that these matters have been the subject of frequent debate in the Gibraltar Legislative Assembly, and that has been the background against which the Chief Minister of Gibraltar has been playing his part in these negotiations.
As to self-government, the treaty of Utrecht, on which our sovereignty is founded, contains in it a provision to the effect that, in the event of the United Kingdom wishing to give up sovereignty, Spain should have first refusal. It has been clear, and was emphasised, for example, by Sir Joshua Hassan in London last Wednesday that the choice for the people of Gibraltar is either to remain under British sovereignty or to move under Spanish sovereignty. There is no third option under the provisions of the treaty. In that context, we emphasise the importance that we attach to the pledge to respect the wishes of the Gibraltar people.
As to the hon. Gentleman's accusation of a sell-out, economically if not politically, the state of affairs in Gibraltar up to now has been nothing but bad for the Gibraltar economy. It has involved an outflow of money


across the border of about £150,000 a week, about £16 million in the past two years. As a result of the changes that came into force yesterday, the prospects for economic prosperity for the people of Gibraltar and the region have been substantially improved.

Mr. Mark Wolfson: Does my right hon. and learned Friend agree that the future of the Gibraltar economy will increasingly depend on the ability of the Gibraltarians to develop it? To this end, will he give what support he can to the establishment and development of some basic further education in Gibraltar? At this stage, this is very limited, which means that the necessary skills for the future are not being developed?

Sir Geoffrey Howe: I take note of that specific point without making any comment about it. My hon. Friend is right in the premise of his question, that the prosperity of Gibraltar will depend on the enterprise of the people of Gibraltar, matched with the courage that they have always shown during the difficult years through which they have just passed.

Mr. Eric Deakins: Does Sr. Moran now fully appreciate that the only way for Spain to regain sovereignty over Gibraltar is for her to set out to win the hearts and minds of the people of that colony?

Sir Geoffrey Howe: That has been clearly stressed in the remarks that I quoted about the need for any negotiating process to have respect for the wishes of the people of Gibraltar. I underline that point.

Mr. James Couchman: I would not wish to be unhelpful in the face of considerable diplomatic triumphs, but, like many other hon. Members, I am concerned to establish that the opening of the gate has merely returned the situation to that which pertained for many years, and that it does not represent a step towards ceding Gibraltar to the Spanish. Therefore, will my right hon. and learned Friend remember that many Gibraltarians are able to trace their ancestry back to this country for many generations?

Sir Geoffrey Howe: I assure my hon. Friend that I have been mindful throughout of the factors to which he has drawn attention, and that in all these matters we have been concerned not just with finding a conclusion that will promote good relations between Spain and Britain but in paying attention to the interests of the people of Gibraltar. I have no doubt that this agreement is in their interests, and it is underpinned by my repeated emphasis on the continued validity of the preamble to the 1969 constitution.

Mr. Jim Craigen: Having arrived in Gibraltar with a parliamentary delegation on the day that the Brussels communiqué was announced, may I ask the Foreign Secretary whether he will take it from me that there is considerable mistrust of Spanish officialdom in Gibraltar? Will the right hon. and learned Gentleman give an assurance that he will do more to reassure the official socialist opposition and the official democratic opposition in Gibraltar that they need not be equally distrustful of the intentions of the Foreign Office?

Sir Geoffrey Howe: I take this opportunity to tell the House that there is no question of the Foreign Office adopting a separate position or policy over this matter. The decisions taken by the Foreign Secretary on behalf of Her Majesty's Government are taken not out of any consideration for Foreign Office interests but because we judge them to be in the best interests of Spain and Britain and of the people of Gibraltar. I well understand that, in the light of the experience of the last 15 years, there is bound to be some mistrust of officialdom of the kind that the hon. Member described on the Spanish side of the border. There is mistrust not just of officialdom but elsewhere. One of the benefits of opening the border will be the gradual dissolution of that mistrust and the improvement of the economic prospects of the people of Gibraltar.

Sir Kenneth Lewis: Is it not clear that this is a splendid agreement, because one can now buy whisky in Gibraltar at £3.50 a bottle? Will my right hon. and learned Friend have a word with the Chancellor of the Exchequer in order to find out whether that price can be emulated here?

Sir Geoffrey Howe: I hesitate to respond favourably to my hon. Friend's invitation to job back in my previous existence in this House.

Mr. Healey: If the Foreign Secretary rejects the Falklands as a precedent for Gibraltar, does he accept the view of King Juan Carlos of Spain and of his colleague the Spanish Foreign Minister that Hong Kong may provide a useful precedent?

Sir Geoffrey Howe: I would counsel the right hon. Gentleman against following that course. He must remember very clearly that British sovereignty over Gibraltar is plainly founded upon the treaty of Utrecht without any limit to its term. That is in total contrast to Hong Kong where 92 per cent. is held on a lease that is due to expire in 1997. I would not encourage the right hon. Gentleman to go down that road.

RAF Molesworth

The Secretary of State for Defence (Mr. Michael Heseltine): With permission, Mr. Speaker, I wish to make a statement about the operation conducted last night at RAF Molesworth to clear the site of trespassers and to fence it.
The then Secretary of State for Defence announced on 17 June 1980 the Government's decision that Molesworth, a disused airfield in Cambridgeshire, had been selected as the second United Kingdom cruise missile base. The normal process of planning consultation was set in hand towards the end of last year against the requirement to begin major construction on the site this autumn if deployment by 1988 is to be achieved.
As the House will be aware, RAF Molesworth, as an unfenced and open site, has been the scene of continued trespass by individuals and groups opposed to its use as a cruise missile base. Their activities have given rise to much local anxiety. The anti-nuclear protest groups have made clear their intention to engage in a systematic programme of deliberate delay and disruption, not excluding unlawful means, in order to prevent its development. It would have been quite wrong to allow such a protest to build up on Ministry of Defence land and to accept that the serious inconvenience to local people would continue.
I therefore directed that the necessary steps should be taken to end this as quickly as possible and with the least likelihood of danger to all concerned. To do so, it was necessary to act in secrecy and with speed in order to prevent the very serious problems which would have arisen from the reinforcement of the protesters that had been threatened. This could have led to a major confrontation with all the risks which that involved to both demonstrators and those responsible for the maintenance of law and order.
The operation began shortly before midnight last night with the arrival of Ministry of Defence police to clear the site of trespassers and to take control of it. The civil police were responsible for policing outside the site itself. At the same time, 1500 Royal Engineers began to fence off the whole site with dannert-type fencing. They are also providing observation platforms and perimeter lighting which will assist the Ministry of Defence police in their continuing task of guarding the site. In addition, members of the Property Services Agency and civil contractors moved heavy equipment on to the site to begin the construction of a permanent weldmesh fence for which planning agreement has already been given.
This House reaffirmed in October 1983 its support for the NATO twin-track decision on intermediate range nuclear forces. The Government very much hope that, now that the Soviet Union has returned to the negotiating table, it will be possible to make progress on the arms control element of that decision. But until progress has been achieved which makes this unnecessary, we shall continue with preparations for the deployment of cruise missiles. That is a decision approved by Parliament. No responsible Secretary of State for Defence, or Government, could countenance such preparations being frustrated by a small, unrepresentative minority within our society.
That is why the action that I have described has been undertaken today. I have myself visited Molesworth this morning in order to pass on the Government's thanks to those concerned. The House will, I know, wish to join me in paying tribute to all those involved in ensuring that this major operation has proceeded so successfully.

Mr. Denzil Davies: The operations about which the statement is made demonstrate again how heavy-handed, how insecure and how insensitive the right hon. Gentleman is when trying to deal with those whose only offence is their wish to protest peacefully against nuclear weapons. We remember the right hon. Gentleman threatening from the Dispatch Box that he would authorise the shooting of unarmed demonstrators. We remember how relentlessly he pursued the prosecution of the hapless Sarah Tisdall. We have read this week, in matters that are sub judice, how he exaggerated the problems of the Ministry of Defence on that occasion. Now we see the right hon. Gentleman doing exactly the same thing again. Clearly he has no understanding of what some of us thought was a civilised and humane way of trying to deal with these problems in Britain.
When the right hon. Gentleman strutted around Molesworth this morning in his flak jacket, did he not realise that he was not evicting some wild, Baader-Meinhof terrorist gang, but that he was evicting 100 British citizens, most of whom are Quakers with a long religious tradition of honourable protest against the weapons of war?
Will the right hon. Gentleman answer three questions? First, how many troops were involved and what regiments did they represent, how many military police were involved and how many civilian police were involved? Secondly, did he personally authorise this ridiculous operation? Thirdly, is he aware that all that he has done has been to sow 100 dragons' teeth? The protest not only will go on but will intensify because of what the right hon. Gentleman did this morning.

Mr. Heseltine: The whole House will have noticed that when what I have done has been to secure the maintenance of law and order and the legitimate rights of my Department to use its own land for its own purposes, the determination that we in this country share to live within the law is wholly repugnant to the Opposition.
If the right hon. Gentleman had taken the least trouble to read the statements of many members of the peace protest groups about the plans they had in mind deliberately to frustrate the Government's intention to develop that base—their widely publicised plans to lie in the path of necessary equipment, to frustrate the contractors, to stop us brick by brick—he would have realised that if I had acted with less dispatch they would have begun to implement those plans and to call up additional resources from all over the country. We could have faced civil disobedience on that site not just for days or weeks but for months.
If the right hon. Gentleman reads what has been clearly stated he will understand that about 1,500 Royal Engineers were used to build a fence. The people who maintained law and order were the Ministry of Defence police and the civil police. However, it would not be appropriate for me to give details of the numbers of policemen involved. If I did that, the only gain would be that it would enable the right hon. Gentleman and his friends to calculate how


many more demonstrators they need in order to — [Interruption.] Today we have heard the petty response of a party whose only real cause of complaint is that it has been deprived of one more opportunity to support lawlessness.

Dr. Brian Mawhinney: Does my right hon. Friend realise that his decision has the full support of my constituents in the nearest city to Molesworth and that it has, in particular, the support of the constituents of my next-door neighbour, my hon. Friend the Member for Huntingdon (Mr. Major), who is today in his customary place on the Treasury Bench? He has vigorously defended his constituents' interests for many months. Does my right hon. Friend accept that his decision, coupled with that of my right hon. and learned Friend the Home Secretary to meet extra police costs arising out of demonstrations at Molesworth, has reconfirmed the belief of the people of Cambridgeshire that this Government will provide the necessary national defence, but not at the expense of their local legitimate interests?

Mr. Heseltine: I am grateful to my hon. Friend for both of his questions. Of course I completely support what he has said about the decisions of my right hon. and learned Friend the Home Secretary. I am also grateful to my hon. Friend for his words on behalf of his constituents, which I very much appreciate. I am particularly grateful to him—and he will understand if I make the distinction — for what he said on behalf of my hon. Friend the Member for Huntingdon (Mr. Major). Throughout the long occupation of parts of the Molesworth site my hon. Friend the Member for Huntingdon has been in the most invidious position as a member of the Government. He has continually made representations to me. I have tried to keep him as fully informed as possible, and I am glad that only about six hours after he was involved in the presentation of a petition on behalf of a very large number of his constituents, we were able—I am sorry about the short delay—to act.

Mr. John Cartwright: Does the Secretary of State agree that we should get last night's events into proportion? Does he accept that within a democracy protesters have a perfect right to demonstrate against aspects of Government policy with which they disagree, but that the authorities are equally entitled to outwit them? That is just what happened last night at Molesworth.

Mr. Heseltine: I am grateful to the hon. Gentleman, as he has made two important points. Every hon. Member recognises that there is a legitimate opportunity for peaceful protest within certain understandable conventions. Indeed, this House is about peaceful protest, and that is one of the great traditions of our democracy. But if a Secretary of State charged with responsibility for maintaining the law in these matters, reads that unless he is careful and gets his plans right he may endanger the very lives not only of male protesters but of women and children, he has a positive duty to take all reasonable steps possible to minimise the force necessary to secure the Government's proper objectives.

Sir Antony Buck: Is my right hon. Friend aware that Conservative Members very much welcome his statement because of the relief that it will give to law-abiding constituents of my hon. Friend the Member for Huntingdon (Mr. Major), who is a Whip, and to the

constituents of other hon. Members? Does my right hon. Friend agree that we have shown our determination to retain and maintain the credibility of our deterrent posture?

Mr. Heseltine: I am most grateful to my hon and learned Friend for that point. Now that the arms negotiations are under way, nothing is more evident than that our policy of deterrence has paid off. Those who are concerned with the deployment of cruise missiles should remember that one of their principal arguments against the missiles was that if we went ahead, the Russians would not talk to us and would move out of the negotiating conferences. However, they have actually moved back. Since we took a decision to deploy cruise missiles in this country in 1979, the Soviet Union has increased its deployment of SS20s by more than 250.

Mr. Tony Benn: Is the Secretary of State aware that the peace camps in Britain, founded on the Gandhi principles of non-violence, are very highly respected all over the world, that the transfer of British territory to an American President so that he can make war from that base without the consent of the Secretary of State, the Prime Minister or the House of Commons is unacceptable, and that the decision to build a Berlin wall around the camp, together with the right hon. Gentleman's readiness to shoot those who might try to get into the camp, shows that the Government are prepared to use the full apparatus of the state to obliterate opposition to their policies?

Mr. Heseltine: I heard what the right hon. Gentleman said about American bases in this country. If I had an apology to make to the House, it would be that I have so slavishly followed the conventions that he so honourably defended when he was a member of the previous Labour Government. However, I do not feel it necessary to make that apology, because I took the view that the right hon. Gentleman's defence policies were broadly right. I do not understand why, in opposition, he has so extraordinarily abandoned them. Perhaps I can take issue with the right hon. Gentleman on this, as on so many other things. He says that the peace groups are respected throughout the world. That is a matter of judgment. But what is respected about this country throughout the world is our love of law and order and our respect for parliamentary democracy.

Sir Anthony Grant: Is my right hon. Friend aware that these pests who have made the lives of the citizens of Huntingdon a misery are certainly not respected by the people of Cambridgeshire or Huntingdon? Is he further aware that our constituents very much welcome the firm and efficient way in which he has carried out this operation? Does my right hon. Friend realise that they greatly admire the dedicated way in which my hon. Friend the Member for Huntingdon (Mr. Major) has fought on their behalf for several months? Finally, is my right hon. Friend aware that he is to be congratulated because the operation was undertaken, remarkably, without any leak from his Department?

Mr. Heseltine: I am most grateful to my hon. Friend, and I agree with everything that he said. However, I have unselfishly to admit that the credit for there being no leak must be extended much more widely than just my Department.

Mr. Peter Pike: How much did last night's exercise cost? Does the right hon. Gentleman agree that


that exercise was more consistent with a police state than with a democracy in the way in which it was carried out in such secrecy? The right hon. Gentleman said that the protesters at Molesworth represented a minority opinion, but does he not realise that opinion polls have consistently shown that the majority of people are opposed to cruise? The Government were elected by fewer than 50 per cent. of the voters and it is they who are in the minority on this occasion.

Mr. Heseltine: The hon. Gentleman will realise that the Government have one of the largest parliamentary majorities since the war. The Conservative party made it quite clear that if it was elected to office it would proceed with the deployment of cruise missiles. We very much believe that the Labour party was quite right in 1979 when it took the decision that led to their deployment in this country.
The cost of the exercise last night was probably relatively small because of the large number of service men involved. It was probably the cheapest way of proceeding, because if we had not carried out that operation we might have suffered substantial delays in the construction programme, which would have imposed a larger cost on the Ministry. The hon. Gentleman asked whether our action was not representative of that of police states. I do not know how one can maintain law and order in a parliamentary democracy without asking the police to ensure that it is maintained.

Mr. George Walden: Is my right hon. Friend aware that most, probably all, Conservative Members believe that the protection of defence establishments is an integral part of our defence policy? Will he continue to take whatever action is necessary within our democratic traditions to avoid a repetition of the shambles at Greenham common?

Mr. Heseltine: I am grateful to my hon. Friend for asking those questions and I sympathise with the approach that he adopts in asking them. The shambles imposed on our society is organised by those indulging in the protest movement. Precisely because we live in a parliamentary democracy and follow the proper traditions of that democracy, there is a limit to the scale on which the police can prevent people from indulging in demonstrations of the sort that we have seen. That imposes a terrifying cost, not just financial but social, on large numbers of citizens who profoundly disapprove of what the protests are all about. A balance must be struck, and what guides my Department, as it did last night and on earlier occasions, is that we always try to use the minimum of force compatible with securing our objectives.

Mr. David Winnick: Is the Secretary of State aware that what took place was an eastern European type of operation—which illustrated only too well the continued erosion of civil liberties that has taken place under Conservative rule? [Interruption.] The shouts that are coming from Tory Members may be likened to the nods of approval that one would expect in eastern European states for action against protests. Is the right hon. Gentleman aware that, no matter what operation took place last night, the campaign against cruise missiles will

continue because we live in a democracy and people who feel so strongly about such matters that they wish to demonstrate will not be stopped?

Mr. Heseltine: The House will think it extraordinary that the hon. Gentleman can be so selective. In talking about what happens as a challenge from the East he conveniently ignores the fact that the East began the deployment of the weapon systems that led to the protests at Molesworth and Greenham common in the first place. If he had a shred of objectivity, he would consider what might happen to people who tried to occupy bases in the Soviet Union in similar circumstances.

Mr. Peter Viggers: Will my right hon. Friend agree that CND consistently and deliberately misleads as to the amount of public support it enjoys in Britain? Does he agree that the true level of support was evidenced by a petition for the removal of the camp at Molesworth, which was signed by more than 90 per cent. of the local population within three days; by a poll at St. Ives which went against CND's protest appeal against cruise; and by a petition at Alconbury for the removal of a camp, which was signed by more than 90 per cent. of the local population in a short time? Will my right hon. Friend join in urging CND to cancel its pointless and disruptive Easter march?

Mr. Heseltine: I support my hon. Friend and admire the energy he puts into the articulation of the case. When public opinion is consulted on these matters, it finds the tactics of the protest groups wholly unacceptable. The problem in a democracy such as ours is that a burden is imposed by tiny minorities behaving in a way that is unacceptable to the vast majority of us. My hon. Friend asks whether I am aware that the views of these minorities are unrepresentative. Yes, I am aware of that, and in my constituency at the last election one such person stood against me. The House will be pleased to hear that I won.

Mr. D. E. Thomas: Will the Secretary of State accept that the tactics employed by the state are equally unacceptable in a parliamentary democracy? Does he understand that the use of massive force in a paramilitary operation by the Ministry of Defence, using troops against civilian peace protesters, undermines the very quality of democracy that he pretends to support?

Mr. Heseltine: It was an interesting choice that someone with my responsibilities had to face. Had I pursued the logic of that question, I would have given notice and presumably deployed what I would have believed to be an inadequate force, and then we could have had thousands, perhaps tens of thousands, of men, women and children with whom to cope. Presumably at that point the hon. Gentleman and his hon. Friends would have told me that I should abandon the Government's policies because an even larger and less representative minority was challenging us.

Mr. William Powell: Is my right hon. Friend aware that the western boundary fence of Molesworth is also the county boundary between Northamptonshire and Cambridgeshire? Will he accept from me the welcome that my constituents in Northamptonshire will give to the action taken by his Department and the civil police during the evening? Is he further aware that my hon. Friend the Member for Huntingdon (Mr. Major) and I have, during


the last weeks and months, received a growing volume of protests from our constituents in Northamptonshire and Cambridgeshire about the growth of criminal and antisocial behaviour by the campers at the Molesworth air base? Will my right hon. Friend accept that our constituents will fail to recognise the description of those people, who have now been removed, as Gandhian in their behaviour, as has been claimed for them? Will my right hon. Friend accept that my constituents will welcome his statement that the preparations for Molesworth will continue, because they know that the surest way in which it will be unnecessary to deploy at Molesworth is if we continue with our efforts until such time as agreement is reached at Geneva?

Mr. Heseltine: I am grateful to my hon. Friend for those remarks. I agree wholly with his last point, and I assure him that the interests of the citizens of Northamptonshire were as much in my mind as the interests of the citizens of Cambridgeshire.

Mr. Bob Clay: Will the Secretary of State admit that this has been another example of the right hon. Gentleman informing the House that he has carried out his orders from General Bernard Rogers in the Pentagon? Did not last night illustrate again the Government's increasing determination to carry out by force what they cannot do by persuasion? It is clear that the majority of people in Britain are opposed to cruise missiles. Given all the heart-rending stories about the dilemmas and so on that the right hon. Gentleman faced, will he now say whether any warning was given to the men, women and children that they would be moved? [Interruption.] Did they receive eviction notices? If it was not appropriate to issue such notices, why have eviction notices been issued at Greenham common since the peace campers first went there? Is it not a fact that because of the tremendous resistance of the women at Greenham, he is now using the iron fist at Molesworth? The logic of the right hon. Gentleman's argument that he is saving money—[HON. MEMBERS: "Too long."] I am taking no longer than did the hon. Member for Corby (Mr. Powell). If the right hon. Gentleman is arguing that his action will save money in the long term—by nipping the protest in the bud now—the logic of that is that he might as well get the troops out now and round up the lot of us—[HON. MEMBERS: "Hear, hear."]—and achieve what he wants in one go.

Mr. Heseltine: It may come as a severe disappointment to the hon. Gentleman to learn that we went to a great deal of trouble to give proper warning to those involved at the peace camp. The chief constable involved, using words which were designed to ensure that the campers were given the chance to go of their own free will, made it clear that coaches were available to take women and children, that welfare services would be available, in conjunction with the Cambridgeshire county council, and that no pressure to move would be put on until the morning. I believe that he went as far as could seriously have been expected in all the circumstances. Great attention was paid to ensure that that message was delivered to the people occupying the land.
The hon. Gentleman repeats parrot cries about the Pentagon which suit the convenience of his prejudices. It will come as a disappointment to him to hear that I did not discuss the plans of last night either with the Pentagon or

with General Rogers, and I have no reason to suppose that they were aware of them in time for them to make any impact whatever on them. The hon. Gentleman talks about persuasion, presumably thinking that we should try to persuade tiny and and unrepresentative groups. We believe that the real challenge of persuasion is to persuade the British electorate to give us a mandate to carry through certain policies.

Several Hon. Members: rose—

Mr. Speaker: Order. I draw the attention of the House to the fact that a further statement follows this debate before quite a heavy day. I ask for shorter supplementary questions, which will lead to shorter answers.

Mr. Eldon Griffiths: Is my right hon. Friend aware that in the vicinity of the great air bases in my constituency, where by far the largest number of American aircraft and personnel are located, the most popular sign in the windows of the houses of the ordinary people who live nearby is not "Yanks go home" but "No peace camps here"? My right hon. Friend's action has been a clear response to the wishes of the vast majority of ordinary people who have the experience of living alongside the American camps and the peace camps and who have no doubt that they prefer the Americans.

Mr. Heseltine: My hon. Friend puts more eloquently than I can the deep conviction that exists on this matter. Any Government since the war could have asked the Americans to go. They did not, because they knew that we gained immeasurably from the American presence.

Mr. Kevin Barron: Does the right hon. Gentleman accept that what happened at Molesworth last night will be seen by people as nothing more than an irrational operation that is part of an irrational policy of having first strike nuclear weapons on this soil? Is the right hon. Gentleman telling the House that the question of law and order is for the Minister of Defence and not for the law courts?

Mr. Heseltine: The answer to the first question is no. The answer to the second question is also no.

Mr. Robert Key: In the interests of lowering the risks of confrontation between the demonstrators and the military, will my right hon. Friend urge my right hon. and learned Friend the Home Secretary to bring forward at the earliest possible opportunity the implementation of section 25 of the Police and Criminal Evidence Act 1984? I believe that this measure would be widely welcomed by the local constabularies involved.

Mr. Heseltine: I am sure that my hon. Friend will understand if I say that I shall ensure that his views are drawn to the attention of my right hon. and learned Friend.

Mrs. Ann Clwyd: The Secretary of State has clearly failed to note that the majority of people have, in opinion poll after opinion poll, spoken against cruise missiles. Has the right hon. Gentleman recognised that point? Will he recognise that the majority of thinking people will see the action last night as crass insensitivity at a time when the Geneva talks are continuing? Will the right hon. Gentleman recognise that the majority of people who have protested peacefully and non-violently at Greenham common and elsewhere are doing the only thing they can to show the Government that they wholly oppose the deployment of nuclear weapons?

Mr. Heseltine: The hon. Lady is completely wrong. Those people could have stood for election in the constituencies, where the people express a proper democratic view. Many of them stood for election and failed. A large number of them sit on the Opposition Benches, and that is why they were humiliated in the last election.

Mr. Michael Mates: Amid all this mock furore from the loony Left, will my right hon. Friend take this opportunity to remind the House of the real success of last night's operation? The real success is the fact that we have revealed again the determination which NATO, with Britain leading, has shown in bringing the Russians to the conference table to discuss disarmament. That is the real success of last night.

Mrs. Clwyd: On a point of order, Mr. Speaker.

Mr. Allan Rogers: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I shall take the point of order after the Minister's answer.

Mr. Heseltine: My hon. Friend the Member for Hampshire, East (Mr. Mates) strikes at the core of the matter. Those who were against the deployment of cruise missiles told us that, if we proceeded, the Russians would not negotiate about arms control. Now that the Russians have come back to negotiate about arms control, those people tell us that, if we continue, the Russians will not negotiate about arms control. Our view is diametrically the opposite—the firmer our deterrent, the more likely it is that the talks will be successful.

Mr. Speaker: What is the point of order?

Mr. Rogers: Am I allowed to state my point of order, or am I being challenged, Mr. Speaker? — [Interruption.] I know that Conservative Members do not have any belief in democracy, so I shall forget all about them. My point of order is—

Mrs. Clwyd: On a point of order, Mr. Speaker.

Mr. Rogers: My point of order is—[Interruption.]

Mr. Speaker: Order. I am trying to help the hon. Member. It might be best if I took the point of order later.

Mr. Rogers: I am trying to control my feelings, Mr. Speaker. I felt that, when I rose to make a legitimate point of order, you were challenging my right to make a point of order. I respect your independence. In that respect, I must admit that I was concerned about the way in which you asked me about the point of order.

Mr. Speaker: Order. The hon. Member should come to the point.

Mr. Rogers: I shall, Mr. Speaker. As previous Speakers have ruled that it would be wrong for Opposition Members to refer to Conservative Members—whether it is right or wrong — as Fascists or neo-Fascists, is it proper for an hon. Member to refer to other hon. Members who have spoken during this debate as the loony Left?

Mr. Speaker: It might be thought to be a term of endearment.

Mr. Anthony Beaumont-Dark: Does my right hon. Friend the Secretary of State

accept that one of the most important outcomes of his action yesterday was the reinforcement of the right of the majority to be heard? Is it not time that the minorities were told—as my right hon. Friend has done on this occasion—that the majority's views must be understood and that their lives should not be continually allowed to be made a misery by these loony people who feel that they have a right to run into the ground the lives of everyone else?

Mr. Heseltine: I do not think that I should adopt the use of the word "loony" as its use appears to be rather sensitive in certain sections of the House. I believe that it is necessary for the parliamentary democratic process to be upheld. That is why we argue in elections, and when we win elections we carry through policies precisely as my hon. Friend suggests.

Mr. Speaker: Order. I say to the hon. Member for Rhondda (Mr. Rogers) that I was not seeking to get a cheap laugh at his expense. I believe that we should seek not to raise the temperature of hon. Members through anything we say in the Chamber. Although I do not think that "loony" is a very unparliamentary word, let us avoid its use this afternoon. Mr. Tam Dalyell. [Interruption.]

Mr. Tam Dalyell: In view of the comment I heard made by a Conservative Member, I point out that I hope that matters of sub judice and privilege will be referred to in the proper way after a certain case is concluded. The remark was quite audible.
On what date was the Prime Minister consulted about this operation, or was it her idea?

Mr. Heseltine: I took the original decision in November. We began planning procedures within my Department. I informed my right hon. Friend the Prime Minister of my plans some considerable time after that, when I believed that the plans could be fully implemented.

Mr. Patrick Nicholls: Does my right hon. Friend agree that the moves at Molesworth last night were moves not against peaceful demonstrators but against those people who, when they decide to demonstrate, reserve unto themselves the right to break the law, be it civil or criminal? Does my right hon. Friend agree that it is immensely sad to note that not one single voice will be raised this afternoon from within a party which still has some pretensions to office to praise the fact that the rule of law has been upheld?

Mr. Heseltine: My hon. Friend has come to the centre of one of the most depressing features of this Opposition. There was a time when there was a consensus about the maintenance of law and order, but the Labour party seems to be incapable of ever standing up for the rights of the majority or, in fact, for the maintenance of law and order.

Mr. Roland Boyes: Is the Secretary of State aware that the Opposition are for the defence of Britain and that they believe, along with the vast majority of people—as expressed through opinion polls—that the deployment of cruise missiles will make Britain a more dangerous place in which to live? Is the Secretary of State aware that the people of Britain will contrast very much the building by the Ministry of a 7½ mile long 7 ft high fence of barbed wire with the building by the peace people of a school and a church, which was dedicated by the Bishop of Huntingdon, and the sending to Ethiopia of 20 tonnes of wheat grown by them on that site?

Mr. Heseltine: The British people will understand that if we had not put a fence around that land, the Ministry of Defence land would have been occupied by increasingly large numbers of people determined to act illegally.

Mr. Robert Adley: Has my right hon. Friend thought about the strange anomaly of the enthusiasm of Opposition Members for opinion polls? May we expect an opinion poll on capital punishment to be as highly regarded by the Labour party? Following the point made by my hon. Friend the Member for Teignbridge (Mr. Nicholls), would it not be right and proper to recognise that the hon. Member for Woolwich (Mr. Cartwright), who speaks for the Social Democratic party and presumably for his Liberal allies, did not share the ridiculous view held by Her Majesty's loyal Opposition towards the maintenance of law and order? May I ask that the word loyal be put in inverted commas in Hansard?

Mr. Heseltine: My hon. Friend makes a critical point. If the Labour party had its policies tested by opinion poll, it would virtually never secure a majority on any one of them. It cannot secure a majority in any circumstances.

Mr. Jeremy Corbyn: Does the Secretary of State accept that last night's jackboot-method attack on the peace camp at Molesworth is but another example of the paranoia and increasing brutality of the Government's policy of foisting nuclear weapons on an unwilling population? What steps is he taking to inform the people of Cambridgeshire, Huntingdonshire and the surrounding districts of the increased danger to their livelihoods of a nuclear explosion because of the presence of nuclear weapons on that site? How many of the people living near to the camp could expect to survive a nuclear attack or the explosion of a cruise missile?

Mr. Heseltine: If the hon. Gentleman will forgive me, I would rather tell the truth. That will perhaps be rather more attractive to the citizens of Huntingdonshire who, I think, know as well as I do that the decision to modernise NATO intermediate nuclear weapons was taken in April 1979 by the Labour party then in government.

Mr. Gavin Strang: Does not last night's massive use of force demonstrate that the Government are hellbent on the further deployment of cruise missiles, which will be American-owned, controlled and operated? Surely he recognises that further

deployment in Europe must damage prospects of progress in the forthcoming United States-Soviet talks on nuclear disarmament?

Mr. Heseltine: I have answered that question. There is no truth in it, and that is why the Soviet Union is back at the negotiating table. This Government are broadly pursuing policies pursued by every Labour Government since the war.

Mr. Kevin McNamara: We have had some splendid revelations today. It took a three-month planning exercise for the Secretary of State to go down in history as the victor of Molesworth common. More British troops were used against 100 British peace campaigners and Quakers at Molesworth common than were used against the Argentines at Goose green. That is the extent of Secretary of State's victory today. If ever a nut used a sledge hammer, it was the Secretary of State on this occasion. Is the Secretary of State aware that with the Geneva talks about to take place, many people throughout the world and in this country believe that we should not be going ahead with any preparations for further deployment of cruise, but that there should be a complete freeze on any deployment until we know the outcome of those talks? When the Labour party is on the Government Benches—[Interruption.]—it will not be long—it will be our policy to rid these islands of cruise, other nuclear weapons and nuclear bases.

Mr. Heseltine: I suppose that it is too much to expect the hon. Gentleman to report accurately what the House has been told. The only people who had contact with the demonstrators were members of the civil or Ministry of Defence police. The Royal Engineers were used to build the fence. To the best of my knowledge—I shall correct this if it is wrong—when I was on the site at about 11 o'clock, no force had been used in connection with moving any demonstrators because they had gone peacefully. One of the reasons why they had gone peacefully was that it was apparent that there was no purpose in them doing anything other than that. If there had been an inadequate presence on that site, they would then have been tempted to resort to the tactics that they had told us they would use — to call up more demonstrators from all over the country. The hon. Gentleman tells us that when the Labour party is in power it will pursue a whole range of non-nuclear policies. He fails to understand that it is because of that threat that it is not in power.

Local Government (Practices and Procedures)

The Secretary of State for the Environment (Mr. Patrick Jenkin): With permission, Mr. Speaker, I shall make a statement.
In the debate on the Address on 7 November I said that I intended to set up an inquiry into various practices and procedures in local government. Following discussions with the Opposition parties and the local authority associations, I am now in a position to give further information to the House.
The terms of reference for the inquiry will be as follows:
To inquire into practices and procedures governing the conduct of local authority business in Great Britain, with particular reference to:

a. the rights and responsibilities of elected members;
b. the respective roles of elected members and officers; and
c. the need to clarify the limits and conditions governing discretionary spending by local authorities

and to make any necessary recommendations for strengthening the democratic process.
Within those terms of reference I am inviting the committee to pay particular attention to the following issues:
ensuring proper accountability for decision-taking to elected members and to the electorate generally; and examining possible ways of strengthening local democracy within the existing structure of local government;
clarifying the status and role of party groups in decision-taking;
ensuring the proper participation and accountability of individual elected members in the decision-taking process;
examining any problems of propriety which may arise from members' conflicts of interest, particularly where officers of one council serve as councillors of another;
considering the merits of the development of full-time councillors; and the related issues of the use of members' allowances and the remuneration of councillors generally;
reviewing the system of co-option of non-elected members;
studying officers' relationships, particularly in view of their legal and professional obligations, with elected members and political groups;
clarifying the limits and conditions governing discretionary spending, including the use of sections 137 and 142 of the Local Government Act 1972, and sections 83 and 88 of the Local Government (Scotland) Act 1973, for political purposes in local government, or in relation to bodies set up, and largely financed, by local authorities.
Local government franchise, finance and structure will be outside the terms of reference.
In view of the growing public concern about the use made by some local authorities of their discretionary powers to engage in overt political campaigning at public

expense, I am asking the committee to submit an early interim report on this question. As far as the report as a whole is concerned, I am asking the committee to aim to report within a year.
It is essential that the inquiry should be both impartial and effective in dealing with these difficult issues. The best way to achieve this is to establish a small committee of people of judgment and ability, headed by a chairman of known integrity. My right hon. Friends the Secretaries of State for Scotland and Wales and I therefore propse to appoint a committee of four or five members chosen for the personal contribution which each can make to the wide-ranging subject matter of the inquiry.
I am glad to inform the House that Mr. David Widdicombe, QC, has indicated to me that he would be prepared to accept appointment as chairman of the committee of inquiry. Further appointments to the committee, of which I shall advise the House, will be made shortly.

Dr. John Cunningham: The Secretary of State has just made a very important statement about local government, which plays a crucial role in our plural democratic society. It is important that the matters that he intends to have examined are examined as objectively and impartially as possible. I welcome the fact not only that the right hon. Gentleman consulted Opposition parties, but that he has placed particular emphasis on the need for impartial approaches on these very sensitive matters.
I should like to ask the right hon. Gentleman several questions, arising not so much from the terms of reference, which my hon. Friends and I believe to be broadly satisfactory—I understand that that is the view of the local authority associations, too—but from some of the points of detail that he spelt out in the statement. Why did he refer only to conflicts of interest in respect of officers who seek to be elected to councils? There are other conflicts of interest in local government at present and they, too, must be examined, particularly when they involve business and commercial interests.
I hope that in taking account of those matters and appointing members to the inquiry the right hon. Gentleman will ensure that the interests of women in local government are represented on the committee of inquiry—

Mr. Eric Forth: Why?

Dr. Cunningham: If the stupid exclamation by the hon. Gentleman is anything to go by, I had better spell out what I think. We very much hope that one of the members of the committee of inquiry will be a woman.
Why does the Secretary of State feel it necessary to have the interim report, especially in view of the time scale? I ask him to assure the House that, if he feels that he must proceed with that—we would prefer him not to — the many more fundamentally important issues involved in his statement will not suffer as a result, and the role and functions of councillors, for example, the legal rights and obligations of officers and the work of local authorities, will not be squeezed out by overemphasis on the voluntary expenditure of local authorities, the discretionary use of sections 137 and 142. I remind the Secretary of State and the House that when those matters have been tested in the courts, the councils have always


been exonerated in their use of such money, perhaps with one exception, which is still sub judice and on which I shall not comment.
I believe that many people involved in local authorities of all political persuasions, whether councillors or officials, will welcome the right hon. Gentleman's assurance that those matters are to be examined, as he described, in an impartial way. If that particularly important aspect of his statement is not adhered to, it is unlikely that there will be a successful outcome.

Mr. Jenkin: I am grateful for the hon. Gentleman's ready welcome for the inquiry. He said in his speech on the Loyal Address that that was the line he would be likely to take if he were satisfied about impartiality. I think that he has shown that he is.
I shall take the hon. Gentleman's final point first. I was gratefully reassured by my consultations with all the local authority associations. They welcome the inquiry and are fully prepared to co-operate with it. That is a very important matter. The hon. Gentleman also asked some detailed questions, one of which was about the conflicts of business interests. They were examined by the Redcliffe-Maud report, but they are comprehended within the phrase that I used about the individual accountability of councillors. I take note of what the hon. Gentleman said about the desirability of having a woman on the committee. I hope that the decision will be made shortly, but I ask the hon. Gentleman to wait until then.
With regard to the interim report, the hon. Gentleman must recognise that there is and has been rapidly mounting public concern over the misuse by some local authorities of their discretionary spending powers at the same time as—

Mr. Robert Hughes: On a point of order, Mr. Speaker. The Secretary of State is speaking about an impartial inquiry, yet referred to the misuse of public funds. That must prejudice the impartiality of any inquiry.

Mr. Speaker: Order. The Secretary of State must take responsibility for what he says, but he was asked a long question and he is now having to answer it.

Mr. Jenkin: Many people regard it as a misuse of public funds. I am prepared to accept that. It is because there are complex legal and political issues that I thought it right to refer the matter to the impartial inquiry. Legal cases demonstrate the complexity of the issues. That is why it is right to ask for an urgent interim report. However, I give the hon. Member for Copeland (Dr. Cunningham) the assurance that that will in no way detract from the work of the committee, and I hope that it will report within a year.
The hon. Gentleman is not right to say that none of those matters has yet been resolved. The case of City of Westminster against the Inner London education authority was decided in the High Court. I understand that ILEA has now dropped the idea of appeal, so that judgment stands. However, the Greater London council case is being appealed. I hope very much that all those concerned with the wellbeing of local government will think it right to respond in due course if the committee decides to call for evidence that would be helpful to its members in reaching their conclusion.

Sir Dudley Smith: I welcome my right hon. Friend's statement, which some of

us feel has long been due. Will the inquiry examine the problem whereby a local authority can give itself planning permission, thus sitting as judge and jury in its own court? It is a long-term problem, sometimes discharged honourably and sometimes not, and it exercises many people.

Mr. Jenkin: I should like to look at what my hon. Friend said. I had not thought of that problem as being within the purview of the committee, except in so far as it might reflect upon the propriety of the decision and the manner in which it is reached. The question of the details of planning law should be examined in another context.

Mr. Simon Hughes: On behalf of my party, I join in welcoming the inquiry, the chairman as named and the Secretary of State's courtesy in fulfilling his obligation to consult spokesmen in Opposition parties about the terms of reference and appointments. I endorse the view that for practical reasons a woman on the committee of inquiry would be a good idea. There are women serving in local government, and they have particular needs. They should be taken into account for all sorts of reasons.
This is an important point. I hope that the Secretary of State accepts that consideration on conflicts of interest should be as wide as possible. All sorts of interests should be considered. I have one substantial regret, that the question of the franchise has been excluded. The Secretary of State's former PPS, the hon. Member for Crosby (Mr. Thornton), shares the view of many hon. Members that proportional representation in local government is the best safeguard against abuse by tyrant majorities — not elected majorities, but majorities of councillors—who are tempted through the grey area into indiscretion and malpractice. My hon. Friend the Member for Liverpool, Mossley Hill (Mr. Alton) and others in Liverpool and elsewhere know full well the implications of such views. Proportional representation in local government, as Bradford demonstrates, would be a much healthier form of local government.

Mr. Eric S. Heifer: On a point of order, Mr. Speaker. We have again just heard reference to something that has appeared in the newspapers — allegations made in relation to people in Liverpool which have not been substantiated. No charges or court cases are pending against anybody. Under the circumstances, is it right that hon. Members should raise such matters in that way when we are discussing setting up an inquiry commission into local government?

Mr. Speaker: I must say again that I cannot be responsible for what hon. Members say in this place. If the hon. Gentleman seeks to put a question about his constituency I shall do my best to accommodate him.

Mr. Jenkin: I am grateful to the hon. Gentleman for his welcome for the committee and for the advice that he gave when I consulted him. It would be inappropriate for the question of the franchise to be referred to such a committee. I understand his views but that matter must be for another occasion.

Mr. Michael Forsyth: I welcome my right hon. Friend's announcement of an inquiry, but will he act now and act quickly against those authorities, whose actions are nothing less than corrupt, which are allowing extremists in their midst to soak the ratepayers to fund


miners, women's committees and every other trendy cause? To give one example, Fife region has spent more than £1 million on funding striking miners. Will my right hon. Friend accept that we welcome a detailed look but we want action against political contributions?

Mr. Harry Ewing: On a point of order, Mr. Speaker.

Mr. Speaker: Order. We cannot have questions following statements peppered with points of order. I shall call the hon. Gentleman to put his question and perhaps he will include his point of order in it.

Mr. Ewing: I know that you are fed up, Mr. Speaker, but I have an important point of order. You have just given a ruling to my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) about what Members say in the House and their being responsible. Is it in order for hon. Members to use the privilege of the House to make statements about councillors being corrupt? The hon. Member for Stirling (Mr. Forsyth) is using the House to describe councillors as corrupt when he simply does not have the courage to go outside and make the same statement. He knows that those statements are simply untrue.

Mr. Speaker: Order. Let us keep moderation in our language. It would be completely out of order to impugn the integrity of any hon. Member in the House and we should be extremely careful about what we say about those outside because they have no right of reply.

Mr. Jenkin: I am well aware of the strong feelings expressed by my hon. Friend the Member for Stirling (Mr. Forsyth) and many people outside the House about some of the payments that have been made by local authorities. They raise complex questions of law and propriety. It would be wise for the House and the Government, before reaching a conclusion on this, to have the impartial advice of a group of men, and perhaps women, of integrity on those difficult matters.

Mr. Richard Holt: Will my right hon. Friend accept that my constituency and Teesside as a whole will welcome his announcement, particularly, I imagine, lifelong Labour councillors, who hope that the committee will look into some of the practices on selection and deselection which are taking place in that area at the moment? In particular, I hope that my right hon. Friend will include in the report the activities of Middlesbrough councillors who are able to claim attendance allowances for themselves for so-called surgeries held in their own front room any evening of the week while they are watching television.

Mr. Jenkin: Members' allowances are well within the terms of reference of the inquiry but I have to disappoint my hon. Friend because I doubt whether the activities of local Labour parties in choosing their candidates will be.

Mr. Robert Hughes: Will the Secretary of State give an assurance that he is not proceeding with this inquiry on the presumption that anyone who is mentioned by his hon. Friends is guilty of some sort of corruption? How will the committee go about taking evidence and who will be allowed to give it? As it is clear that some of the matters to be discussed are matters of opinion and judgment rather

than simple legality, will the right hon. Gentleman give an assurance that all the evidence provided to the committee of inquiry will be published in full? As the inquiry has obviously been in the right hon. Gentleman's mind for some time, why has he given only the name of the chairman of the inquiry? How shall we be consulted, for example, about who will be the impartial member nominated to represent Scottish interests?

Mr. Jenkin: I have made no assumptions whatever about any activities that may have been referred to in the House during the course of the statement, or outside, where many hon. Members are aware that there has been growing disquiet about a number of activities that have become apparent in local government. That is why we are having the inquiry. It will be for the committee to decide whether and how to call for evidence but the committee is not empowered to compel witnesses to appear. It will be for the committee to decide whether any evidence given to it is published or given in confidence. The hon. Gentleman may make his own inquiries, but there may be a number of people, perhaps serving council officers, who would like to feel that any evidence or help that they may be able to give to the committee would be treated as confidential. But it will be for the committee to decide how to conduct its affairs.

Mr. Christopher Hawkins: Is my right hon. Friend aware how welcome the inquiry will be in High Peak and in Derbyshire as a whole? Will he ensure that the inquiry investigates the decision of Derbyshire county council to force schools to overprint school stationery with anti-nuclear slogans?

Mr. Jenkin: That would be a perfectly good piece of evidence on which to seek to apply to the committee.

Mr. Tony Banks: The Minister is prejudging the matter.

Mr. Jenkin: I am not prejudging anything at all. I am merely saying that it is a matter on which it will be appropriate to give evidence to the committee.

Mr. Banks: Is the Minister aware that the reason local authorities and the GLC decided this morning to submit evidence to the inquiry is that local government has nothing whatever to hide, which is more than one can say for the Government. This will not be an impartial inquiry in that sense because the Government have already had their mind made up for them by their Back Benchers, as we have seen this afternoon. Will the terms of reference of the inquiry extend to the influence of freemasonry in local government, which we consider to be insidious and dangerous? Will the Secretary of State be accepting nominees for the membership of the committee of inquiry from the local authority associations?

Mr. Jenkin: The question of evidence of outside influences on members would, I should have thought, be germane to the question of the independence and accountability of members of local authorities. I have no doubt that, if there is an opportunity and the hon. Gentleman wishes to present evidence on freemasonry, the committee will welcome that. I consulted all the local authority associations, including the Association of London Authorities and the GLC, and I found unanimity for the view that it would be better not to have any serving councillor or serving officer of any existing local authority


on the committee. In considering the membership I shall take close account of that advice. The hon. Gentleman must await the announcement of the further members.

Dr. Keith Hampson: My right hon. Friend's statement is welcome, particularly for people in the metropolitan counties such as west Yorkshire and Leeds, where we are already well on the way to seeing £1 million spent in political propaganda. Will he reassure people in those areas that the interim report will be speedy and that it will be the prime and sole concern of the committee initially and not just part of its general examination of all the other issues as well? We do not want to feel that my right hon. Friend is fudging the issue or that the committee will simply identify abuses. Can he assure us that the committee will produce positive recommendations upon which he will act? People in Leeds and west Yorkshire know that there is abuse.

Mr. Jenkin: It is my intention to ask for an urgent interim report. I assume that the committee will do its very best to fall in with my request. No doubt the committee will receive much evidence on these matters and will wish to take account of it—including evidence of the strength of many people's feelings on the issue.

Mr. Andrew F. Bennett: To demand from the committee an interim report on one narrow party political point will not help it to stand a chance of being accepted as impartial. Would it not have been better to allow the members of the committee to decide which issues they wished to tackle in an interim report? Secondly, if there is to be an interim report, could it not consider the problems of those many councillors who, as a result of the economic policies of the Government, have been made redundant after giving long service to local government and now find it extremely difficult to receive sympathetic treatment in relation to social security and unemployment benefit because of their duties as councillors? Would not that be a better topic for the interim report than the narrow party political issue that the right hon. Gentleman has dragged in?

Mr. Jenkin: I hear what the hon. Gentleman says. There has been a general welcome both inside and outside the House for my intention to ask the committee to study a matter that is the cause of widespread public concern. No doubt the other matter could be tackled in connection with the question of the remuneration of councillors.

Mr. Barry Henderson: Contrary to what was alleged, my hon. Friend the Member for Stirling (Mr. Forsyth) has already widely published a pamphlet listing in detail the abuses to which he has just referred in brief summary. Is my right hon. Friend also aware that the representatives of about 95 per cent. of my constituents will warmly welcome his announcement? Their only anxiety will be to know how long it will be before the abuses about which they are concerned are brought to light by the committee. Can anything be done in the worst cases? Well over £1 million has already been spent by Fife regional council in helping people with jobs to stay on strike, and many unemployed people and pensioners in my constituency feel bitterly that their rates are being abused without discussion or vote in the regional council.

Mr. Jenkin: Those problems fall squarely within the terms of reference of the committee. It would be right to leave them to the committee. I assure my hon. Friend that we shall ask for an urgent interim report.

Mr. Ewing: Can the right hon. Gentleman give us an assurance in relation to the spending referred to under section 88 of the Local Government (Scotland) Act? Can he assure us that the purpose of the inquiry is not to stop such spending altogether but to define the parameters within which it may take place? Does the right hon. Gentleman agree that there is an equal possibility that the inquiry might agree on wider rather than narrower parameters?

Mr. Jenkin: I can assure the hon. Gentleman that there is no intention to ask the committee to consider the abolition of that section. Whether it should be redrafted to resemble the corresponding English section is a matter on which we should await the committee's advice.

Sir John Osborne: Is my right hon. Friend aware that the education committee chairman in Sheffield has written to school governors and chairmen of governors, and has embarked on a publicity campaign directed at parents, blaming the Secretary of State for Education for failures in the education system? Would that be a suitable subject for investigation by the Committee?

Mr. Jenkin: The gentleman would be perfectly entitled to express his view as a private citizen, but perhaps he would not be entitled to spend ratepayers' money on so doing. That is the issue that is causing concern and on which the committee will be asked to judge.

Mr. Terry Fields: Surely the clue to the real purpose of the inquiry lies in the innuendos of the Secretary of State, Conservative Members and the whingeing Liberals? The inquiry is part and parcel of an attack on Labour-controlled authorities, prompted by the campaign that is to ensue in the coming months. Is not the Government's intention to mask the successes in Liverpool, where 200 jobs have been created and 2,268 council houses will have been built by May, while the Government and big business have done nothing? Should we not borrow a doctrine from the British Boxing Board of Control, which would diagnose the Secretary of State as being punch-drunk from last year's hiding and in no condition to take on Liverpool and other areas this year?

Mr. Jenkin: I am afraid that the affairs of the British Boxing Board of Control will not fall within the terms of the inquiry.

Mr. Derek Spencer: Is my right hon. Friend aware that those of us who served in local government before we came to this place are reassured by the setting-up of the committee? One of the fears engendered by our experience was that there was plenty of evidence that public money was spent on a basis of political partiality. If local government has nothing to hide, it has nothing to fear, and one can expect widespread submissions to the committee from every quarter.

Mr. Jenkin: My hon. and learned Friend's proposition was also put very firmly by all the local authority associations. I found that most reassuring. These matters could very properly be subjects for the inquiry.

Dr. John Marek: We have witnessed the jackboot methods of the Ministry of Defence in the


previous statement. If the Secretary of State for the Environment is to avoid the same charge, can he assure us that the composition of the committee will be truly impartial and generally acceptable to both sides of the House? Will the right hon. Gentleman take this opportunity to pay tribute to the thousands of councillors of both parties throughout the country who give sincere and loyal service well beyond any recompense in terms of expenses and allowances? If the Secretary of State is worried about democracy and about proper financial accounting, surely he should set up an inquiry into the workings of central rather than local government.

Mr. Jenkin: I am entirely at one with the hon. Gentleman in paying tribute to the many councillors who give loyal service far beyond the call of duty. It is a matter of public record that the proposed chairman of the inquiry, Mr. David Widdicombe, stood as a Labour candidate for the constituency of Totnes in his youth. He has authorised me to say that he is not now a member of any political party. I shall certainly keep the questions of impartiality and balance in mind when appointing the other members.
The hon. Gentleman's last question is not relevant except in so far as it bears upon the conduct of business by local authorities.

Mr. Piers Merchant: I congratulate my right hon. Friend on his statement. Is he aware that it will be especially welcome to my constituents in Newcastle upon Tyne, who have laboured under the spending abuses of both Tyne and Wear county council and the Newcastle city council? Would it not be appropriate for the inquiry to take evidence connected with the donation of more than £300,000 by the county council in support of the miners' dispute and a similar donation by the Newcastle city council, the operation of the Newcastle city council priority area teams in spending large sums of money on political propaganda, and the noted increase in the past year in spending allowances for members of Tyne and Wear county council?

Mr. Jenkin: All those matters seem to be proper subjects for evidence to the committee. The interim report will be confined to the question of the use of local authority powers to spend ratepayers' money on political propaganda. Many of the other matters suggested by hon. Members on both sides of the House will fall entirely within the committee's terms of reference but would not be subjects for the interim report.

Mr. Hugh Brown: The Secretary of State has made a very important statement. I make no complaint about the fact that there was no similar statement from the Secretary of State for Scotland. I know that the right hon. Gentleman is here, and I accept the convention, but it is never satisfactory.
What consultations have there been with Scottish interests? The Secretary of State was asked whether the committee would have a Scottish member. Would it not have been better to set up a sub-committee or a separate committee if, in the opinion of the Secretary of State for Scotland, there is a need for such an inquiry?

Mr. Jenkin: I assure the hon. Gentleman that there was full consultation with COSLA by my right hon. Friend the Secretary of State for Scotland. I understand that COSLA

is satisfied with the proposed terms of reference. It is within our contemplation that a distinguished Scot might be asked to serve as a member of the committee.

Mr. Robert B. Jones: Will the terms of reference permit the committee to consider the practice of local authorities that use pre-tender conditions and contract clauses to impose political views? I refer to councils that have barred from their tender lists contractors who have carried out operations at Greenham common and other military installations. Has my right hon. Friend had an opportunity to study Dr. Goodison-Wicke's book entitled "The New Corruption" which charts the enormous growth of such activities in local government? Will all of those issues be considered by the committee?

Mr. Jenkin: Contract conditions are specialised matters and hardly bear on the conduct of council business. I do not think that that would be within the terms of reference. However, it will always be open to anyone to make a suggestion as to how the terms of reference should be widened. Dr. Goodison-Wickes' pamphlet has been read widely in local government. Although it presents a particular view of the problem, it shows some of the grounds for concern that many right hon. Members have expressed.

Mr. John Evans: In view of the Government's record of attacks on local government in the past five years and in view of the outrageous statements that Conservative Members have made today, is the Secretary of State beginning to form the opinion that the inquiry can be regarded as impartial only if he ensures that not one member of it has anything to do with the Conservative party?

Mr. Jenkin: I suspect that that might be difficult to achieve but I intend to ensure that the members of the committee are recognised for their impartiality and integrity. I hope that that satisfies the hon. Gentleman. The questions that have been put to me at the Dispatch Box today have served only to reinforce the wisdom of referring these issues to a committee of this type.

Mr. Spencer Batiste: Is my right hon. Friend aware that West Yorkshire metropolitan county council, through its leader, recently issued a secret memorandum exclusively to Labour councillors asking them to suggest up to £50,000-worth of spending on road programmes in their wards? Does he agree that that is a legitimate cause for anxiety among many people who regard it as an erosion of the traditional values of local government? Can my right hon. Friend confirm that the terms of reference of the inquiry will be sufficiently wide to enable it to consider this and similar cases?

Mr. Jenkin: I can give my hon. Friend the assurance for which he asks.

Mr. Guy Barnett: The Secretary of State will be aware that, for years, the responsibility borne and the business carried out by leaders and chairmen of committees has grown. Will the committee be competent to re-examine the proposals that were made by the Robinson committee on the possibility of paying leaders and chairmen of committees in view of the substantial responsibilities that some of them now have?

Mr. Jenkin: Yes, Sir.

Mr. Eric Forth: Perhaps my right hon. Friend could meet at least two of the Opposition's requests by appointing a Scottish woman. That would kill two birds, as it were, with one stone. My right hon. Friend has said that franchise, finance and structure will not be considered by the committee. Structure is being dealt with differently, but can my right hon. Friend confirm that the Government are dealing with the financing of local government urgently? Can he also confirm that any recommendations that arise from the investigation into the financing of local government will appear before, or at least at the same time as, the recommendations of the committee of inquiry, so that the matter might be dealt with comprehensively?

Mr. Jenkin: I assure my hon. Friend that I have nothing but respect for Scottish women, as my mother was one. I also assure my hon. Friend that the finance study that I have asked my right hon. Friend the Minister for Local Government and my hon. Friend the Under-Secretary of State for the Environment to undertake are well under way, but it will be some months before we shall be able to embark on public consultation. I see no overriding need for the work of the committee and those studies to proceed in tandem. They are addressed to important but different matters. However, I take my hon. Friend's point.

Mr David Alton: I especially welcome what the Secretary of State said about protecting people who give information from vindictive retaliatory action. Will he consider two issues that arise out of his decision yesterday to reject the Asda hypermarket application, which the police have announced today that they will investigate? Will he ensure that the committee investigates that matter? Secondly—

Mr. Terry Fields: On a point of order, Mr. Speaker.

Mr. Speaker: Order.

Mr. Alton: Will the Secretary of State examine issues raised by the "jobs for the boys" policy that is being pursued by councils such as Liverpool, in which political placemen are put in positions of power purely because their political faces fit?

Mr. Terry Fields: On a point of order, Mr. Speaker.

Mr. Speaker: Order. The hon. Gentleman cannot make a point of order just because another hon. Member has made a provocative statement.

Mr. Terry Fields: On a point of order, Mr. Speaker.

Mr. Speaker: Order. I shall take the point of order after the Secretary of State's answer.

Mr. Barry Porter: Some of them are crooks.

Mr. Jenkin: The matter that the hon. Member for Liverpool, Mossley Hill (Mr. Alton) has raised would be quite inappropriate for referral to the committee now. The appointment to councils of paid officials with party affiliations is a matter that the committee could consider, but I would not wish to argue that it would necessarily be appropriate. Many of the changes in the conduct of local authority business reflect fundamental changes in the nature of the business that is done and the nature of the societies in which councils operate. Far be it from me to suggest, by referring many of these issues to the

committee, that the changes are necessarily wrong. On the contrary, it might well be that the law could catch up with the way in which many councils wish to conduct their business. In those circumstances, it is right that democratic freedoms, the rights of oppositions and fundamental freedoms should be preserved.

Mr. Terry Fields: On a point of order, Mr. Speaker. I must object most strongly to the language of the hon. Member for Liverpool, Mossley Hill (Mr. Alton). Such language is part and parcel of early-day motion 353 in which the hon. Gentleman impugns the integrity and honesty of people outside who are in no position to defend themselves. The hon. Gentleman talked about "jobs for the boys". We are creating jobs for the boys and girls of Liverpool, which he and his crowd cannot do.

Mr. Speaker: Every hon. Member must take responsibility for what he says in the Chamber. I cannot repeat that too frequently.

Mr. Heffer: Further to the point of order, Mr. Speaker. I have been in the House for 21 years now, and important points of order of this type have always been listened to with care by Mr. Speaker. The hon. Member for Wirral, South (Mr. Porter) referred to certain people as crooks. The hon. Member for Liverpool, Mossley Hill (Mr. Alton) said that the police are investigating an event in Liverpool. Is it not clear that when the police are investigating a matter it is not right for any hon. Member to make statements in the House impugning anyone who might be involved? It is certainly wrong for hon. Members to refer to people who might be involved, or who are being investigated, as crooks. Only after the investigations, legal action and a decision by the courts can such statements be made. On that basis, I trust that we shall not have any more of this, otherwise the hon. Members concerned should leave the House, make their statements publicly without privilege and face the consequences. I believe that they should withdraw their statements.

Mr. Alton: I leave it to the hon. Member for Wirral, South (Mr. Porter) to make his own statement to the House.
Further to that point of order, Mr. Speaker. The early-day motion to which the hon. Member for Liverpool, Walton (Mr. Heffer) referred precedes the statement made by the Merseyside police this afternoon that they intend to investigate the matter. As far as the statements made in that early-day motion are concerned, the deputy leader of the Liverpool city council and a developer who wanted a £20 million development in Liverpool—

Mr. Speaker: Order. That has nothing to do with me. Let us seek moderation in our language in this place. That has always been our tradition. I never heard any accusation or use of the word "crook" referring to any hon. Member. If that happened, I would expect the hon. Member concerned—and I did not hear it—to withdraw the remark.

Mr. Barry Porter: Further to that point of order, Mr. Speaker. I made no mention of any hon. Member. I merely heard one Opposition Member refer to the hon. Member for Liverpool, Mossley Hill (Mr. Alton) as a rat, and while he has certain unattractive—

Mr. Speaker: Order. I would not like that either.

Mr. Frank Dobson: On the basis that every hon. Member should be opposed to


corruption wherever it occurs, would the Secretary of State talk to the Leader of the House and his Cabinet colleagues and suggest, as there is continuing disquiet about the behaviour of hon. Members and the behaviour of lobbying organisations that operate in the House, and, to a large extent, finance lunches and dinners in some of the dining rooms of the House, that while it is appropriate for there to be an inquiry into allegations of corruption and malpractice in local government, it would also be proper for the House to prove that, while endorsing the inquiry, we are not living in a glasshouse and throwing stones at other people?

Mr. Jenkin: It may be within the recollection of the hon. Gentleman that such a study of affairs in the House led to the setting up of the Register of Financial Interests to which most hon. Members contribute, even if it is only one way. Obviously this would be quite outside the terms of the inquiry.

Mr. Derek Fatchett: Given the extent to which Conservative Members have been prepared this afternoon to throw cheap political jibes and to prejudge the issues, would the Secretary of State reconsider his earlier comment that evidence will be taken in private in certain cases? Surely, if evidence is taken in private, cheap allegations can be made against individual councillors and officers without those councillors and officers having the right to reply to such allegations. All that, I argue, will lead to a judgment on the part of the public and those involved in local government that, far from being an impartial inquiry, the inquiry is already predetermined to come up with one particular decision.

Mr. Jenkin: There is no suggestion that the inquiry is predetermined. As I made clear in what was, perhaps, a rather lengthy answer to the hon. Member for Mossley Hill, there is no presumption whatever that the existing statutory framework is necessarily the right one.
On the question of evidence in private, this must be a matter for the committee. It would not be improper for the committee, if it considered this necessary in order to protect witnesses who might be serving officers or who may have other roles, to be prepared to hear evidence in private. But, of course, the membership of the committee will be a sufficient talisman of its ability to distinguish between what it should take note of and what, if there is no possibility of challenging it, it might do better to ignore.

Mr. Greville Janner: Is not the real purpose of the Minister's inquiry to try to prevent the use of sections 137 and 142 of the Local Government 1972 Act by councils such as Leicester which are suffering from the ugliest and highest levels of rate-capping, so that they will no longer be able to inform their electors as to the awful results of the Government's rate-capping legislation? When the Minister says that information is proper but political propaganda is not, is he not defining information as that which he and the Government put out and political propaganda as that which is put out in the same way by their opponents in the honourable traditions of Her Majesty's Opposition?

Mr. Jenkin: All I can say—and I am sure that the hon. and learned Gentleman has studied the recent

judgment of Mr. Justice Glidewell — is that this is a distinction that is drawn in the interpretation of section 142. I assure the hon. and learned Gentleman that this is by no means the central purpose of the committee's inquiry. The wide-ranging nature of the comments that have been made in all parts of the House indicates that the committee is, indeed, welcome and that it will have a wide range of issues to which to address itself. Indeed, I think that the members of the committee are in for a rather interesting time.

Mr. Jeremy Corbyn: Does not the Secretary of State accept that since 1979 he and his Government have pursued a vendetta against local government and, in particular, a vendetta against those authorities that have sought to use existing local government legislation to the full to try to ameliorate some of the social and economic conditions in which they are placed?
The statement that he has made this afternoon and the observations of his hon. Friends suggest to me and, I believe, to many people outside the House, that this is not an objective inquiry at all, but a form of attack on those local authorities that are trying to use existing local government legislation to the full.
Does the right hon. Gentleman not further accept that implicit in the terms of reference that he has announced this afternoon is an attempt to curtail local government democracy in the country? I refer him to the section in which he states that there will be an inquiry into the propriety of members of councils being employed by another council. Should he not be considering the difficulties and the lack of democracy suffered by many local authority workers who are denied the right to stand for election to a local authority or to participate in local authority affairs? Finally, has the right hon. Gentleman consulted any trade unions on the matter?

Mr. Jenkin: The purpose of the inquiry and the terms of reference of the inquiry in general were welcomed by the local authority associations of all political persuasions. One issue on which there was no argument by those associations is that it would be right for the committee to examine the growing practice of officers of one authority being councillors of another. The obvious conflicts of interest which could, but do not necessarily, arise are matters that, rightly, should be subjected to such an impartial inquiry.

Mr. Peter Pike: Will not the Secretary of State accept that, despite his repeated assurances throughout the statement that it would be an impartial inquiry, the large majority of people who are interested in genuine local government, bearing in mind the Government's track record of the last six years, will view this as an attempt by the Government further to restrict local government? Would it not be far wiser to hold an inquiry into giving genuine freedom, power and finance to local government to meet the needs and requirements of the local communities who elect councillors?

Mr. Jenkin: There is no reason why the committe should not examine the giving of genuine freedom and power to local government. The only matter that I think it should not examine is local government finance, which is the subject of separate studies.

Mr. Bill Michie: Will the Secretary of State agree that often, during business in the


House, when Parliament considers local government in terms of its democracy, its accountability and its finance, the old proverb springs to mind, "Physician, heal thyself"? Would it not be useful, therefore, if we had that pinned up on the wall as a reminder to ourselves?

Mr. Jenkin: I think that I understand the point that the hon. Gentleman makes. If the affairs of all local authorities were as open and accountable as are the affairs of any Government of whatever party to the House of Commons and to the electorate, there would be fewer grounds for the disquiet that has arisen and for the general welcome that the inquiry has received.

New Zealand (Nuclear Vessels)

Mr. David Winnick: On a point of order, Mr. Speaker. As I understand the position, it is not possible to table private notice questions relating to the policies of other Governments. I raise this point because many hon. Members are deeply concerned about the pressures that are being applied to a democratic Commonwealth country, namely, New Zealand, arising from its policy of using port facilities for nuclear vessels.
We have close ties with Commonwealth countries. There are items of furniture in this very Chamber given to us by New Zealand and other Commonwealth countries. Is there any way in which we can express our concern about the pressure being applied against New Zealand, especially by the United States? Could a message be debated and sent from this House?
Finally, as this concerns a Commonwealth country, will the Table Office be able to accept questions on it?

Mr. Speaker: The hon. Gentleman has more or less answered his own point of order. He is an experienced Member and there are many ways in which matters of this kind can be raised. There is, however, no ministerial responsibility for anything that the New Zealand Government may do.

People's Right to Fuel

Mr. Dennis Canavan: I beg to move,
That leave be given to bring in a Bill to prevent disconnections of domestic fuel supply in cases of hardship; to implement a statutory code of practice for dealing with such cases; to introduce a fuel allowance scheme to help eradicate fuel poverty; and for related purposes.
This is my third attempt to introduce a Bill of this nature. I shall not dwell on the aspects of disconnection and threatened disconnection, save to say that last year the domestic fuel supply of 120,000 households was disconnected when most of the people involved were already suffering hardship. The Bill would make it an offence to carry out such disconnections without a court order. Those cases show that the present voluntary code is not working. The Bill therefore seeks to introduce a statutory code of practice.
I shall address most of my remarks today to the third aspect—the introduction of a comprehensive system of fuel allowances tied to housing benefit. Understandably, a great deal of public attention and controversy has recently centred on the DHSS regulations for payment of the severe weather extra heating allowance. Indeed, the controversy was such as to provoke the Minister for Social Security to come out with the Newtonian admission in the House that the regulations were "weird and wonderful". They are so weird and wonderful that people in the north and in Scotland, where the weather is coldest, are excluded from extra payments while people in the south and parts of the midlands where it is not so cold are included.
It is worth pointing out that the rules in question are internal to the DHSS and have never been approved by Parliament. If everyone is sitting comfortably, I shall explain just how weird and wonderful they are. If X is the 24-hour mean atmospheric temperature in degrees Celsius, subtract X from 15·5 for each day of the week, add up the seven answers and call the total Y. That gives the number of degree days. If Y is greater than or equal to Z, where Z is the DHSS trigger point, you get your money. If Y is less than Z, you do not get your money. Hands up all those who understand that. It seems that Members of Parliament find it impossible to understand. If Members of Parliament do not understand the formula themselves, they certainly have a brass neck expecting the public outside to understand or accept it.
When I taught mathematics I used to try to teach from examples rather than merely speaking in the abstract. I shall therefore give some examples of the way in which the trigger mechanism works. The trigger point varies from place to place. I have tried to obtain support for the Bill from both sides of the House, so I shall not seek to score party points by choosing one Labour and one Conservative area. Instead, I shall take my own constituency of Falkirk, West and compare it with that of the right hon. Member for Plymouth, Devonport (Dr. Owen), a non-party leader who occasionally sits beside me. The trigger point for Falkirk is 122 degree days. For Plymouth where the climate is warmer it is only 105 degree days. In other words, if the temperature in Plymouth remained at half a degree above freezing point for a week the extra allowance would be paid. In Falkirk, it would have to remain at about 2 deg below freezing point all week for the extra allowance to be payable. The


assumption seems to be that the people in Falkirk are thick skinned. In fact, they are very warm-hearted people, although that is no thanks to the Government's coldhearted policies.
It may be argued that my example is hypothetical because temperature is not constant but varies from day to day and from one time of the day to another. In an area such as Falkirk the temperature at the coldest time of the day would probably have to fall as low as minus 25 deg Celsius before people qualified for the extra allowance. A further anomaly is that for the purpose of the allowance the temperature is measured not in Falkirk but at the meteorological station 45 miles away at Leuchars, where the weather could be quite different.
The Bill seeks to introduce a scheme based on climatic differences. I have broken my own tradition and sought all-party support. I normally just ask my hon. Friends. Last year the hon. Member for Dundee, East (Mr. Wilson) introduced a Bill covering just one aspect of this matter. My Bill is more comprehensive. The hon. Member for Dundee, East asked me to sponsor his Bill on that occasion and he has reciprocated by sponsoring my Bill.
I also invited the Leader of the House to sponsor the Bill, and he very kindly replied that he would consider my request, but he wrote to me recently saying that on second thoughts he had decided to turn down my invitation. I am sorry about that, as the Scottish Conservatives are reported to have passed a resolution last weekend demanding an end to the disparity that I have described. It is perhaps a measure of the lack of interest on the part of Scottish Tory Members that not one of them is present, although I invited several of them to sponsor the Bill. Indeed, I received what I thought was a sympathetic response from one of them. To save him embarrassment, I shall not give his name, but he once held very high rank, he is a well known lawyer, well respected in Scottish legal circles, and a close friend of the Prime Minister. He said that he would listen to my speech before making up his mind and then signal to me if he was prepared to sponsor the Bill. Unfortunately, he is not even here to listen to my speech.
The Glasgow Herald today reported that the Solicitor-General
felt it extraordinary that while Braemar had been the the coldest place in Britain one night the 'trigger' point for payment had not been met because the temperature recording station was at Dyce, Aberdeen.

The report also states:
Mr. Fraser, in his letter to Mrs. Thatcher, said that the present scheme could be so flawed it might have to be wholly reconsidered under the Department of Energy review.
As a member of the Government, he should have known that it is not the Department of Energy but the DHSS that is supposed to be reviewing the matter.
I have heard rumours that the Government intend to scrap the heating allowance altogether. That would be an absolute travesty of justice, not only for the people of Scotland, but for people in all parts of the United Kingdom. It would be better to introduce a comprehensive system of fuel allowances with a regional element based on climatic differences. I do not have time to go into the details of the scheme now, but under the terms of the Bill the detailed regulations would be subject to parliamentary scrutiny.
At present hundreds of thousands of people are suffering from hypothermia, or the threat of it. Many of them are old-age pensioners. In some cases it would not be an exaggeration to say that they are not merely suffering but dying from hypothermia. Therefore, the House must respond to their needs constructively. My Bill is an attempt to introduce a comprehensive charter to eradicate fuel poverty, and I therefore ask the House to support it.
Question put and agreed to.

Mr. Deputy Speaker (Sir Paul Dean): Who will prepare and bring in the Bill?

Mr. Canavan: Mr. Kevin Barron, Mr. Dennis Skinner, Mr. Gordon Brown, Mr. Robert Parry, Mr. David Winnick, Mr. William McKelvey, Mr. Gordon Wilson, Mr. Jim Craigen, Mr. Eddie Loyden, Mr. Bob McTaggart, and myself, and I have still space for one Tory Member, if he wants to signal me that he wants to sponsor my Bill.

PEOPLE'S RIGHT TO FUEL

Mr. Dennis Canavan accordingly presented a Bill to prevent disconnections of domestic fuel supply in cases of hardship; to implement a statutory code of practice for dealing with such cases; to introduce a fuel allowance scheme to help eradicate fuel poverty; and for related purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 22 February and to be printed. [Bill 76.]

Local Government (Rates)

Mr. Andrew F. Bennett: On a point of order, Mr. Deputy Speaker. As the Chairman of the Select Committee on Statutory Instruments, the Committee asked me to express its concern at the unusual speed with which the order has been brought forward for debate today. I believe that it was laid in the House only last Wednesday, which has placed the Scrutiny Committee in considerable difficulties.
Under Standing Order No. 104(9) we are obliged to draw any instrument to the special attention of the House. If we want to do that we must afford the Government Department involved the opportunity first to furnish us with a written memorandum and, if necessary, to give oral evidence. You will appreciate that as the Government laid the order only on Wednesday, it is extremely difficult for us to scrutinise it, ask for witnesses, and oral or written evidence. I appreciate that under the Standing Orders of the House the Government are not required to ensure that an instrument has been to the Scrutiny Committee before it is brought to the House, but the custom and practice have always been to attempt to do that unless there is an extreme reason of urgency why they cannot give the Scrutiny Committee reasonable time to carry out its functions.
Can you, Mr. Deputy Speaker, or Mr. Speaker, look into the matter to see whether it was urgent, what attempts the Government made to ensure that the Scrutiny Committee had the opportunity to hear witnesses and to take written statements if it wanted, and why it was necessary to introduce it in such a way as to break the traditional convention that the Scrutiny Committee is given adequate time to consider an order? That is especially important in view of the controversial nature of much that is contained in the order.

The Secretary of State for the Environment (Mr. Patrick Jenkin): Further to that point of order, Mr. Deputy Speaker. I may be able to help the hon. Gentleman. I wish to preface my remarks by saying that the whole House appreciates the work done by the hon. Gentleman, as Chairman of the Joint Committee on Statutory Instruments, and those who serve with him. The House is indebted to them.
I am aware that some members of the Committee expressed concern about the timing of the debate after the meeting of the Joint Committee. The arrangement of business is a matter for agreement through the usual channels and subject to correction. I am not aware that the Opposition expressed concern about this issue. However, it is not unusual for important business to follow swiftly after Joint Committee consideration. I assure the hon. Gentleman that had the Joint Committee raised an important query about the validity of the draft order, business would have been rearranged. However, in this case the Committee had no doubts. Although the timing may be unusual, I do not think that it is in any way improper and, therefore, I think that the business may proceed.

Mr. Andrew F. Bennett: Further to that point of order, Mr. Deputy Speaker. It seemed unfortunate for the Secretary of State to imply that because I happen to be a member of the Opposition, I am a party to the business of the House regarding this matter. I raised the point as the

Chairman of the Select Committee on behalf of all the members of that Committee. It must be the duty of the Whips on both sides of the House to ensure that traditional procedures are observed as far as possible.

Mr. Deputy Speaker (Sir Paul Dean): I cannot help the hon. Gentleman very much on that. He has had the opportunity to put his case, it has been heard by the House, and there has been a further point of order from the Secretary of State. Both he and the right hon. Gentleman have dealt with the point. Their remarks were addressed more to the usual channels than to the Chair. The hon. Gentleman will realise that it is not possible for the Chair to assist him in this matter. However, he has had an opportunity to put his point on the record, and I am sure that it has been heard on both sides of the House.

Mr. Alan Williams: Further to that point of order, Mr. Deputy Speaker. My hon. Friend the Member for Denton and Reddish (Mr. Bennett) makes a valid point. He is not party to any agreement that is reached through official channels. Regardless of the fact that we cannot alter the position today, it would be appropriate that if in future there is a departure from normal conventions in relation to timing, at least the Chairman of the Select Committee on Statutory Instruments should be informed and given an opportunity to consult his colleagues on whether they wish to make representations to the leaderships of both sides of the House. Will that be considered in future?

Mr. Deputy Speaker: I hope that the exchange has assisted the House. This is not a matter over which the Chair has any definitive authority.

Mr. Patrick Jenkin: I beg to move,
That the draft Rate Limitation (Prescribed Maximum) (Precepts) Order 1985, which was laid before this House on 30th January, be approved.
The order is the first of two that will come before the House under section 4 of the Rates Act 1984. It is a stage in the rate-capping process, and the House is asked to approve the maximum rate or precept limits for each of the authorities selected for rate capping. This order covers the four precepting authorities, and my present intention is to table the order covering the rating authorities that have not agreed their limits in a few days. I certainly take note of the point you made, Mr. Deputy Speaker, about the question of timing.
The House knows that the Government's case is that the purpose of rate capping is to protect ratepayers from the impact of high rates caused by high spending. All the authorities designated last July have budgeted this year to spend both more than 4 per cent. above their targets and more than 20 per cent. above their GREs. The order covers the Greater London council, the Inner London education authority, the Merseyside county council and the South Yorkshire county council. I shall say a word about each in turn.
The GLC has doubled its spending in three years. It has more than doubled its precept since the Socialists took control of county hall in 1981. It spends as if there were no tomorrow, and I suppose that for the GLC, there is no tomorrow. Its £10 million advertising campaign has become a national scandal. This year, it is recruiting 1,700 extra staff, and last week GLC councillors — I quote from The Standard of 1 February—were


deluged with 125 separate spending plans together as thick as five telephone directories. Most had been delivered to their homes (at more expense no doubt) only the night before. Others were actually trundled in while the meeting was going on. Small wonder,
writes The Standard,
that even a Labour councillor complained that he had not had time even to look at the proposals and could not vote for them.
In the face of that evidence, how can the GLC argue that the precept limit in the order is impossible?
The Inner London education authority is unique, not only in its constitution but in its unrivalled extravagance as an education authority. During the past three years, its school population has fallen by 10 per cent., but its spending has increased by almost a third to more than £900 million. Compared with other authorities, ILEA now spends per pupil 29 per cent. more than Manchester, 31 per cent. more than Sheffield and 54 per cent. more than Bradford. Those familiar with Bradford will know that it has a large immigrant population.

Mr. Frank Dobson: Will the Secretary of State turn his mind to the Z scores of deprivation produced by his Department, which show that those who live in the Inner London education authority area are far more deprived than the populations of any other cities? Will he also confirm that Her Majesty's inspectors of schools have never substantially criticised the organisation, operation or standards of ILEA? Indeed, when a special survey of the authority was carried out by Her Majesty's inspectorate of schools, it endorsed the progress being made by that authority.

Mr. Jenkin: If the hon. Gentleman catches your eye later, Mr. Deputy Speaker, he will be able to make those points. The fact is that ILEA's spending per pupil is extravagant compared with other inner-city areas that have high incidence of deprivation, large ethnic minority populations and many children whose mother tongue is not English.
I remind the hon. Gentleman that until ILEA was stopped by the court, it was spending no less than £750,000 on a blatant political advertising campaign. I wonder whether my hon. Friends who represent London constituencies noticed a recent advertisement in The Guardian for a personal assistant to the leader of ILEA? That person must have
Political sensitivity and a supportive understanding of the objectives of the majority party (Labour).

What will be the cost of this person's salary to be paid by inner London ratepayers? The answer is £17,598 a year.
Since 1978–79, Merseyside county council has increased its spending—

Mr. Guy Barnett: rose—

Mr. Jenkin: I shall not give way. This is a short debate, and the hon. Gentleman may have an opportunity to catch your eye later, Mr. Deputy Speaker.
Merseyside county council has increased its spending by almost 150 per cent. since 1978–79. That is faster than any of the five Merseyside district councils, including Liverpool. It is the worst spending record of any of the six metropolitan counties. Its annual transport deficit is no less than £82 million, and during the past three years, Merseyside's precept has increased by more than 50 per cent. Yet Merseyside has decided to help to fund

Liverpool's first novelist in residence. The council has just given a £1,500 grant to the makers of a record album attacking the police. The council gave its staff the day off with pay to strike against abolition—the strike did more to generate support for abolition than anything else the council had done.
South Yorkshire council has increased its spending since 1978–79 by 132 per cent., which is more than any of the four district councils in its area. Recently, it gave £100,000 to the miners. It has decided to put nuclear-free-zone signs on 21 primary routes through the county at a cost of £100 per sign. It subsidises public transport to the tune of no less than £73·5 million a year. Buses cost the passenger transport executive £1·92 per passenger mile, but the passengers pay less than a quarter of that sum. The hapless ratepayers must pay the difference.
Those are the councils which claim to be starved of money for their essentials, yet the examples that I have quoted show them to be wildly extravagant. Why should the hundreds of responsible councils suffer for the extravagance of the few? Many councils, Labour as well as Conservative, budget to stay within the guidelines, and those four should do the same.
Before I discuss the individual precept limits, I should remind the House of the stages in the process that have already happened. On 24 July last year, I listed the 18 authorities to be capped and announced their maximum expenditure levels. Under the Rates Act they could appeal against those expenditure limits and ask that they be increased. As the House knows, the Labour party's national executive committe decided on a policy which it described as "non-compliance". As a result, not one Labour-controlled authority availed itself of the appeal procedure. I extended the time and gave the clearest sign, both inside and outside the House, that the professed reasons for not appealing were misconceived. But still not one authority appealed—

Mr. Jack Straw: Including Portsmouth.

Mr. Jenkin: Portsmouth is now prepared to accept the rate limit that has been set and will budget within it.

Dr. John Cunningham: In view of what the Secretary of State said about redetermination, and especially his reference to Portsmouth, perhaps I could remind the House of what the Conservative leader of Portsmouth city council, Mr. Ian Gibson, said about applications for redetermination in the Municipal Journal of 3 August last year:
The thing about redetermination is that it could come with strings attached that my council could not possibly accept.
"My council" is a Conservative council. That is the reality of redetermination.

Mr. Jenkin: The truth is that Portsmouth city council quickly came to the conclusion that it did not need to apply for redetermination. Councillor Gibson assured me the other day that the council will make a budget fully in line with, and conceivably below, the rate limit that has been set.
On 11 December, I announced the rate support grant settlement and, basing myself on those expenditure levels, I announced the rate and precept limits to the House. Again, the Rates Act provides a right of appeal. Any authority that wishes to challenge its limit can come in and argue for a higher limit. None of the four precepting authorities named in the order has done so.
However, in recent months non-compliance has taken a curious form. Substantial quantities of paper arrived on the desks of my officials, through various routes, setting out, often in considerable detail, many of the facts and figures that those authorities wished me to consider in reaching decisions on their rate limits. Indeed, the information flowed in so thick and fast that when I met a deputation on Monday from 17 rate-capped and nine other Labour-controlled authorities, the pile of information on the table in front of me stood over six inches high. If that is non-compliance, so be it. Around that table were sitting some of the real non-compliers, who had put in no information because they had followed the national executive committee's instruction. I gained the impression that they felt a little let down by what their colleagues had done.
That brings me to the individual precept limits set out in the schedule to the order. The GLC's precept limit of 36·52p is what I proposed on 11 December. It corresponds to a spend of about £785 million, assuming a modest drawdown of balances. Compared with the GLC's proposed budget of more than £860 million, the result of passing the order will be that next year's GLC precept will be about 7p less than it would otherwise have been. Of course, if we add the London Regional Transport levy, the amount that ratepayers will pay will be higher than this year' s precept—[HON. MEMBERS: "Ah!"] It is no good hon. Members saying "Ah". Everyone knows that this year the GLC manipulated its precept downwards by drawing over £200 million from balances while increasing its spending by over £100 million. Because of this manipulation, there would have had to be a big increase in the joint precept of the GLC and ILEA anyway next year. Without rate capping, the fact remains—it cannot be seriously challenged — that from next April, Londoners would have had to pay 7p more in the pound than will be the case.

Mr. Tony Banks: The right hon. Gentleman referred to "modest reserves". What reserves has he calculated that the GLC has to draw on? Why, after three requests from the GLC for him to give the information on how he arrives at that reserve, has he still refused to reply?

Mr. Jenkin: The hon. Gentleman knows that, under the Act, I am entitled, if I do not have all the detailed figures, to make assumptions. There would have been no need for me to make any assumptions if all the authorities had followed the procedures laid down in the Act and provided the information for which they were asked. It has been open to them to have discussions with me and my officials about expenditure levels and rate limits. I have dealt as even-handedly as I can between authorities in calculating limits, but in setting those limits I have to take account of the individual circumstances and the differences between authorities.
I have made assumptions only where information has not been provided or is not available about authorities' individual circumstances. I have sought to compare reserves with statistical average levels for the class of authorities and have also allowed for possibly inadequate reserves in 1985–86 in those cases where local authorities have made substantial use of funds this year, 1984–85, so depleting their reserves. I point out to the hon. Member for Newham, North-West (Mr. Banks) that the councils

not giving us information could have worked both ways. By not using the statutory procedures, the authorities, and the GLC is one, may have concealed contingencies built into their budgets.

Mr. Tony Banks: The GLC has not.

Mr. Jenkin: The hon. Gentleman may say that, but it may have shortfalls in spending. I know that the GLC has been trying to get rid of money as fast as it can, but this could happen. I have had to make assumptions, and those assumptions may well have been in favour of the authority. The effect will be to make the limits more generous than they appear. The percentage cuts of which the authorities are making much are unreal because they include large allowances for planned growth.
The ILEA precept is a different story. In December, I proposed a precept limit of 74·19p. The limit of the order is now 3·06p higher, at 77·25p. The reason for the increase is straightforward. ILEA has been helpful in supplying information. Part of this consisted of a breakdown of its reserves. It appeared that part of those reserves—those contained in its building and renewals fund — represented money from the sale of capital assets. By law, such money is not available for use to support revenue spending.
Now that I have the detailed figures, I have made an allowance for this factor and I have made a number of other adjustments in the light of ILEA's information. Accordingly, ILEA's precept has been raised to 77.25p. This still represents a reduction of nearly 3p compared with this year's ILEA precept of 80p. Only a few moments ago, I received a further letter from the chairman of ILEA, and this is being considered.
The 3.06p uplift does not allow ILEA to spend any more money. It is still based on an expenditure level of £900 million. What has changed is how much of that spending can be financed from precept and how much from reserves. I hope that if any of the rate-capped authorities believe that the same consideration might apply to them, they will note that it was information given to us from ILEA that led to a modest easing of the precept limit. In the absence of rate capping, ILEA was proposing to spend not £900 million but £957 million. This would have required a precept not of 77.25p but of 83.1p.
Let us take the GLC and ILEA precepts together, and apply that to a typical, two-storey terraced house in Tower Hamlets, with a rateable value of £211—quite a humble house. The ratepayers of that house will next year save £32 from what they would otherwise have had to pay. Without rate capping, they would have had to pay £32 more, on the budgets that both the GLC and ILEA say that they would have introduced without rate capping.
I shall give another example, of a small corner shop in Lambeth, with a rateable value of £350. There, next year the ratepayer will pay no less than £52 less than he would have paid without rate capping. When further savings are added because of rate capping in some boroughs, I think that ratepayers will see quite clearly that rate capping is at last coming to their rescue.

Mr. Chris Smith: In that case, will the right hon. Gentleman tell the House what the ratepayers with children in Inner London will say when they have to pay more for school meals and when school facilities and the quality of education go clown as a result of this decision?

Mr. Jenkin: They will think much the same as the parents in any other area who have been paying higher prices for school meals for years. The level of payment for school meals in ILEA, given all the available concessions, has become a scandal. It is possible for ILEA to do something about that, but that is up to it. I am merely setting the upper limit, and it will have to decide how it will live with the limit.
There is a different story on Merseyside. Here, the precept limit of 82.86p, though no change from what I proposed in December, represents a 27 per cent. increase on this year's precept. There is a clear reason for that. This year, Merseyside is planning to draw down special funds so that its precept is much less than would be necessary to support its spending this year if it had to be financed by ratepayers. The information that I then had suggested that the council would not be able to do this again next year. Even a reduced level of spending would have to be financed almost wholly from the precept. Therefore, in any event, the precept will have to be higher. Again, after carefully considering the further information that Merseyside county council gave me—non-compliance again—I decided to confirm the limit that I originally proposed.

Mr. Robert N. Wareing: It may seem to the right hon. Gentleman that he is benefiting Merseyside by allowing it to increase its rate precept to 82·5p in the pound, which is a 27 per cent. increase on last year. The right hon. Gentleman is presumably trying to protect ratepayers against increases. Is he interested in value for money? By asking Merseyside council to reduce its budget by £23 million, which is 10 per cent. of the budget, he is asking the ratepayers to pay 27 per cent. more for 10 per cent. less.

Mr. Jenkin: Both sides will get a great deal more value for money from what the council spends. The hon. Gentleman is anticipating my next point.
Compared with a £249 million budget, which Merseyside says that it would have introduced in the absence of rate capping, this precept, although a 27 per cent. increase on last year, is 50p in the pound less that it would otherwise have been. That is what Merseysiders would have had to pay if there had not been rate capping.
I can take an example from the constituency of the hon. Member for Bootle (Mr. Roberts), of a typical semidetached house in Bootle with a rateable value of £250. There will be a saving for the owner of that house of about £125 compared with what he would have had to pay in the absence of rate capping. I ask the House to contrast what will happen to that ratepayer in Bootle with what will happen to a similar ratepayer in Liverpool, whose rates will not be capped. I think that the ratepayers in Bootle may well consider themselves to be mighty lucky.

Mr. John Powley: I am interested in what my right hon. Friend is saying about how much the domestic ratepayer will save, but will he bear in mind that a large proportion of rates is paid by commercial and industrial ratepayers, who get no relief according to their ability to pay? It is that sector as much as any other that needs relief from the high-spending authorities.

Mr. Jenkin: That is why I quoted the corner shop in Lambeth as an example of a saving of £1 a week.
Finally, there is south Yorkshire. In December I proposed 81·32p, a reduction on this year's precept of just

over 2 per cent. South Yorkshire sent me a certain amount of information, but I concluded that it was not such as to lead me to change my proposal. South Yorkshire was proposing to spend £206 million next year. Thanks to rate capping, south Yorkshire's precept will be about 35p in the pound below what it would have been, saving the ratepayer in a typical three-bedroomed semi in Barnsley or Sheffield about £63. That is on a rateable value of £180.
Those are the precept limits for the four precepting authorities. If the House approves the order they will have over a month in which to decide on their budgets and declare their precepts which, to be legal, must not be higher than the figures in the order.

Mr. Barnett: Will the right hon. Gentleman explain upon what basis the limit of a precept has been fixed in each case?

Mr. Jenkin: The Act obliges me to take account of the spending level, the amount of the rate support grant and the availability of reserves. I was given a great many figures by these authorities, but I still had to make assumptions, and I explained to the hon. Member for Newham, North-West (Mr. Banks) the basis upon which they were made.

Mr. Barnett: Will the right hon. Gentleman publish the calculations in each case?

Mr. Jenkin: The Act requires me to make assumptions. I have said that if an authority asked for an alternative level, I should be prepared at that point to discuss the assumptions with the authority, but as none has done so I was entitled to make the assumptions that I did.

Dr. Cunningham: Will the right hon. Gentleman give way?

Mr. Jenkin: Perhaps the hon. Gentleman will allow me to finish what I have to say on this point. In answer to the hon. Member for Newham, North-West I said that one of the factors that we had in mind was what would be the appropriate average level of reserves for authorities in that class. The Inner London education authority and the Greater London council are each in a class of their own. Therefore we had to make assumptions on the best information available. If an authority wished to challenge those assumptions, it should have made an alternative proposal which could have been discussed.

Dr. Cunningham: How can the right hon. Gentleman ask the House to approve this order with its so crucial consequences for four elected authorities while at the same time he denies to the House the fundamental information upon which he has made his calculations? Is not the House of Commons entitled to know the assumptions that have been made?

Mr. Jenkin: The Act is quite clear. It entitles me to make assumptions. And the procedure is quite clear. I have made it clear on many occasions, both individually to the authorities and in public, that if any of these four authorities had come forward with another proposal it could have sat down with me and my officials and gone through the figures. As it was, not one of them chose to do so. Therefore these levels are before the House.
Predictably, the capped authorities prophesy all sorts of doom and disaster. Yes, they will have to make savings, as others have done already. Nevertheless, having considered the matter with some care, and bearing in mind


the GLC's grossly inflated budgets, the very modest level of savings being sought from ILEA and the huge subsidies to transport in south Merseyside and Yorkshire, I am in no doubt, and the House should be in no doubt, that all four authorities can budget to spend sensibly on services while remaining within the limits in the order.
All four authorities were represented in the deputation which came to see me on Monday. Let me tell the House what that deputation asked for. Although this House had voted on 15 January to accept the rate support grant settlement for next year, as set out in the report, the deputation asked in effect that I should cast it aside; that I should abandon targets and hold back; that I should make some huge but unspecified increase in the amount of rate support grant; that I should abandon the Rates Act which was passed by the House last year; and that, apparently in return for all this, the 26 authorities represented round the table would be good enough to join me in some commission of inquiry. They said nothing about cutting out growth or about trimming their spending. Indeed, the figures they tabled at the meeting assumed continuing growth in spending.
I doubt whether the House was therefore surprised to read in Tuesday's press that I had been unable to accede to those requests. But of course it is worse. I do not suppose that there was a single person in that room in 2 Marsham street on Monday who thought that those proposals were seriously intended. On the contrary—

Mr. Tony Banks: Why not?

Mr. Jenkin: I shall answer the question "Why not?" Every one of those council leaders was there for quite different reasons, which had been spelt out with admirable clarity in a two-page report that had been presented to them three weeks earlier by Councillor David Blunkett of Sheffield, the leader of the deputation. It has come to be known as the Blunkett report.

Mr. Peter Bruinvels: rose—

Mr. Jenkin: Perhaps my hon. Friend will allow me to deal with this point. They wanted to be able to say that when I laid this order before the House today I would be unable to claim that the capped authorities simply refused to meet me at all or that they were unwilling to put their case collectively. They also wanted to
ensure that at the councils' budget meetings in March elected members cannot be accused of failing to challenge the Secretary of State face to face in this way prior to considering the kind of tactics, potentially illegal or otherwise, being considered by the councils concerned".
The Opposition might be interested to hear that the Blunkett report went on to say that it was their aim
to prevent the break-up of groups arguing about whether or not we should meet Jenkin.
Finally, it was their aim to dislocate the Department of the Environment's parliamentary timetable.
Rarely can a deputation have been launched with such shoddy and transparent humbug. Rate capping will not only curb the spending of the most extravagant over-spenders. It will protect the ratepayers in those areas. And as I said in our rate support grant debate last month, it will allow me to set fairer targets for the much larger number of prudent, low-spending councils which for too long have had to suffer for the extravagance of the few.
For all these reasons I ask the House to approve this draft order.

Dr. John Cunningham: The House is asked today to approve an order through which the Conservative Government will impose a maximum rate on four democratically elected local authorities. We are being asked to take an unprecedented step to impose further central control over the lives of more than 9·5 million people in Merseyside, south Yorkshire and London.
In spite of repeated assurances since taking office in 1979, Tory Ministers are now face to face with the reality of the abysmal mess that they have created in local government during the last six years. In 1980, the present Secretary of State for Defence promised that the Government would not fix the level of an authority's rates. He said:
Those decisions remain with the authority." — [Official Report, 5 February 1980; Vol. 978, c. 251.]
The present Secretary of State for Employment made a similar promise. When he was Minister for Local Government and Environmental Services he said:
It is not suggested that it"—
the needs assessment—
prescribes a specific level to which an authority ought to spend … I want to make it quite clear that that was not the purpose. We are seeking to find the fairest way to distribute public money to local authorities … " — [Official Report, Standing Committee D, 1 April 1980; c. 941.]
The right hon. Gentleman also said:
My Department will not be in the business of saying how much each authority should spend, where it should or should not make cuts or on what it should spend money. … Local authorities are autonomous … but the ultimate decision on rating and on the volume of expenditure of local authorities is a matter for the councillors themselves." — [Official Report, Standing Committee D, 27 March 1980; c. 840–41.]
That is the sort of promise that the House has been given by Conservative Ministers since they came to office. Now all of that is being swept aside by the Secretary of State's proposals.
As policy failures have embarrassingly mounted, the Government have simply ploughed deeper into the rights of local councils — [Interruption.] Does the hon. Member for Wirral, South (Mr. Porter) wish to intervene or does he just want to waffle on from a sedentary position? As policy failures have embarrassingly mounted, the Government have ploughed deeper into the rights of local councils, casting aside promises in the way that I have described, ignoring all evidence, defying good administrative experience and refusing to learn the lessons — and that from a Government who are allegedly committed to freedom, choice, accountability and the better use of public money.
Market forces are apparently no longer in vogue, at least in the Secretary of State's Department. Massive intervention on a widening scale is the reality. Whitehall-imposed decisions are his practice. The second-guessing of every council in Britain by civil servants is the norm, and chaos is the result. Even The Economist was recently moved to describe the Government's approach to local council finance as "lunatic." Need we say more?
Tory Ministers have legislated themselves and local government into a legal quagmire and they know it. As councillor Roger Parker Jervis, the Tory leader of Buckinghamshire, said, councils have been "legislated into a corner" by this Government. The truth is that the Conservative party no longer has any clear philosophy of local government or well-based body of coherent thought about its role or contribution in a plural democratic


society. It has no consistent principles in its approach and no thoughts about a stable, productive relationship between the centre, national Government, and local government. Indeed, in stumbling into the real crisis that exists, successive Ministers have displayed contempt and imcompetence towards local administration on a quite staggering scale.
I say quite bluntly that the order has no place in the House of Commons. The House is not equipped or competent to fix the rate of any local authority in Britain, let alone that of four altogether, in one brief debate. In our view, Government have no right to these powers either, and are similarly and singularly unfit to use them with any proper understanding of the consequences. The budget of Merseyside county council is £180 million, of south Yorkshire £172 million, of ILEA over £900 million and of the GLC over £900 million. Yet Parliament is asked to discuss, understand and approve in three hours the consequences of reducing those budgets by more than £200 million. It is a preposterous proposition and the House is singularly unfit to decide upon it.
Of course the request is absurd. We do not have the information. We do not even have all the information that the Secretary of State possesses. As he has just made clear, he refuses even to be candid with the House about the assumptions that he is making. In reality, we are being asked to rubber-stamp an imposed control, regardless of the consequences for the education of children in London, for bus services in south Yorkshire, for police and fire services in the metropolitan counties and for the quality of public services for millions of people.
The Rates Act is an enabling Act, and a general powers measure that allows Tory Ministers to bypass the ballot box and to decide in Whitehall on the quality and level of services provided in the towns, cities and counties of Britain. The order makes the accountability of elected council members to their communities an irrelevance. It destroys the relationship, based upon universal suffrage, through which voters have always been able to hold their elected councillors to account. Nothing positive or worthwhile will emerge from the application of these powers which, judging by today's detailed story on the front page of The Guardian, are about to be extended to the total control of local councils' own money from their own capital receipts.

Mr. Patrick Jenkin: At Question Time the hon. Gentleman will have heard my hon. Friend the Under-Secretary of State deny absolutely and categorically the suggestion embodied in the two headlines involved in the story in The Guardian. There is no foundation for it at all. No such proposal is on the table. As the hon. Gentleman knows, we are discussing with the local authority associations, as I promised, what changes will be necessary in the capital control system in order to reconcile their legitimate aims with the Treasury's legitimate aim of keeping control over public expenditure. I hope that the hon. Gentleman will not pursue that point.

Dr. Cunningham: I heard the Under-Secretary of State and I have listened carefully to what the Secretary of State has said. They have both denied the headline, but they have not denied the detail of the story at all. They have admitted that the matter is under consideration, and that causes me considerable concern. On the subject of

promises, I shall tell the right hon. Gentleman what one of his Cabinet colleagues, the Secretary of State for Employment, said. I quote from the Local Government Chronicle. The right hon. Gentleman was talking about local government finance and said:
It will certainly not involve central Government telling local government what to spend … nor will it mean cash limits with a statutory ceiling on rate increases.
The reality is that we have had all these promises before, and they are simply hollow. Moreover, they have been cynically cast aside by, among others, the Secretary of State.

Mr. Martin M. Brandon-Bravo: The hon. Gentleman used the phrase, "their own capital receipts." Is it not true that many of those capital receipts were originally subsidised from central funds, sometimes by as much as 65 per cent.? How does that make them the local authorities' own capital receipts?

Dr. Cunningham: The hon. Gentleman should read the words of his right hon. Friend the Secretary of State for the Environment who, in making his statement in December, and in the emergency debate the following day, was at least moved to concede that it is the councils' own money. If on nothing else, I agree with the Secretary of State on that point.
The Government are forcing local councils to be lenders and, on an increasing scale, using councils' own money to buttress the political aims and objectives of Government policy. That is another grotesque abuse of power, and one that will be totally destructive of local accountability. Just as the water industry is to be used as a tax collector for central Government, regardless of that industry's economies, and as with the gas and electricity industries, local government's financial control and freedom over its own money is to be removed. In pursuit of a manifestly failed economic policy, which is leading this country deeper into unemployment and despair, this Government choose scapegoats on all sides. Local government is a favourite target, but not one credible economic argument has been, or can be, advanced in favour of total control of councils' expenditure generated from their own resources.
The right hon. Gentleman made a number of claims about reductions in rates. As usual, he had nothing to say about the fact that it is widely recognised that the real reason why rates have increased by 141 per cent. since 1979 is because of Conservative policies, in particular the systematic reduction of rate support grant.
He also had nothing to say about the impact of the order on the quality and availability of services to the almost 10 million people who will be affected by it. He chose singularly to ignore the fact, in speaking of the authorities, that, despite his criticism of them, their local communities had voted for Labour administrations, and in some cases had consistently done so. The right hon. Gentleman is asking the House to bypass the political decisions of those communities.
Rates have gone up dramatically as a result of Government policy. All local authority associations say so and the Audit Commission says so in its report. Tory councillors say it, as do national newspapers such as the Financial Times, The Guardian and The Times. Only the right hon. Gentleman, his ministerial colleagues and a few trusty Back Bench supporters try to deny it.

Mr. Peter Bruinvels: Will the hon. Gentleman agree that there are only low turn-outs in the areas about which he has been talking? Only a small number of people pay rates, the number of votes cast in those areas is not high and consequently the voting numbers are not representative of the local communities. The hon. Gentleman cannot say, therefore, that the voting figures reveal the kind of services and spending that he is advocating. People want a reduction in rates and a reduction in services as well.

Dr. Cunningham: I remind the hon. Gentleman that in our democracy we have a universal franchise; everyone is entitled to a vote. More households in Britain pay rates than pay taxes. I assume that the logic of the hon. Gentleman's argument is that if people do not pay they should not vote, a concept which we fundamentally reject and which has no place in a democratic society.
Neither the Act nor the order will enable the Government to give any significant or meaningful help to Tory councils, which Ministers have persistently promised to do, and the right hon. Gentleman made that promise again today. The recent rate support grant report laid bare the hollowness of that promise. Nor will the Act mean any significant advantages for industry and commerce, as the Department's consultants recently reported.
After its leak to The Guardian, I was sent a copy of a report commissioned by the Department entitled "The Effect of Rates on the Location of Employment". It cost £50,000 of the taxpayers' money to produce; its 100 pages cost £500 a page. It concludes that there is no foundation for the Government's argument that rates have caused the loss of jobs. Three years ago my hon. Friend the Member for Blackburn (Mr. Straw) produced a paper on the subject. It covered three pages, as against the 100 pages of this document, and my hon. Friend's paper was presented to the right hon. Gentleman free of charge. It gave him the information that is now given at a cost of £50,000.

Mr. Richard Holt: I have had a communication from the south Tees business community. They, not the accountants or the hon. Member for Blackburn (Mr. Straw), create jobs and wealth, and I will send a copy to the hon. Member for Copeland (Dr. Cunningham). It shows that, as a direct result of this year's imposition of rates in Cleveland, the business community estimates the loss of a further 8,000 jobs in that area.

Dr. Cunningham: Surveys done in the past—many were done at the time of the passage of the Rates Act—concluded that rates formed a small percentage of business costs. I have not seen any evidence, from the Government or the Tory party, to contradict that information.

Mr. Holt: rose—

Dr. Cunningham: I will not give way. I must move on.
The Secretary of State also ignored his powers in section 5 of the Act to set an interim limit while the negotiations to which he referred took place. Why did he do that? He announced his intention on 11 December 1984, with the deadline of 15 January 1985, a hopeless timetable, given the two-week holiday period in between.
To add confusion and to cloak his intentions, the Secretary of State has persistently refused to tell the councils or Parliament what assumptions he has made

about councils' finances in fixing their rates. What is being hidden? The right hon. Gentleman's political bias as well as his inconsistency are being disguised, and I again challenge him to explain why the House of Commons, in being asked to approve this order, and the councils affected, are being denied this crucial information.
I shall give way to the right hon. Gentleman if he will give an explanation. Of course he cannot, and he will not, because he is afraid that the House will understand why he has made the assumptions that we believe he has. He is afraid to put his fairness, or lack of it, to the test.
I learn today, most disturbingly, from the Labour leader of Haringey borough council, Councillor George Meehan, that Conservative councillors in the borough have told him that they have been told of the assumptions made by the right hon. Gentleman in respect of Haringey borough council. That can only be described as contemptible, especially since, as everyone knows, the Labour party is in control of and responsible for the affairs of that borough. It is yet another way in which the right hon. Gentleman is seeking to bypass the democratic wishes of the people of the borough.

Mr. Patrick Jenkin: Either Councillor Meehan or the hon. Gentleman has misunderstood the position. I have said nothing to the Conservative members of Haringey which would justify the hon. Gentleman's statement. What I have said—what I said the hon. Member for Newham, North-West (Mr. Banks)—is that one of the factors which we have had in mind is to compare the reserves of an authority with the average level of reserves of authorities of that class, and that would seem a reasonable exercise.
Many of the authorities have told us their reserves and have given us many of the figures that go to make up the reserves. Where they have not, we have had to make assumptions. It would have been perfectly proper for Councillor Meehan or anybody else to have come to us and said, "We think that this is too tight. It can only be raised. The Act does not allow us to reduce the rate limit, only to raise it." Anybody could have come and discussed that issue with my officials and the whole thing could have been gone into. They chose not to do that. I am entitled to say, therefore, that the limit is acceptable to them.

Dr. Cunningham: If this is all so innocent, why will not the right hon. Gentleman publish the assumptions? There has been no convincing answer. We have received correspondence about the matter, it has been raised on the Floor of the House and repeated requests have been made, but the right hon. Gentleman has given no explanation which is satisfactory to the House and the councils concerned. As to what I have said about George Meehan—he is not only a political colleague but a friend—I specifically had the assertion checked before I raised the matter in the House. Councillor Meehan authorised me to say what I am saying. I do not say this lightly, without authority or frivolously. The action to which I referred cannot contribute to the happy or speedy resolution of these difficulties.

Mr. Jenkin: The hon. Gentleman has made his point. There is no truth in any suggestion that I have made available details of the assumptions. It would have been improper for officials to have had meetings of that sort


with minority members of the council. I hope that the hon. Gentleman will withdraw any suggestion that my officials have behaved improperly.

Dr. Cunningham: The argument about the application of these rate limits rests not just on the right hon. Gentleman's assumptions but on the use of grant-related expenditure as one of the two crucial tests before authorities are designated under the Act. Grant-related expenditure assessments have been rejected as an objective test by all local authority associations. None of them, including associations under Conservative political control, accepts that test. Yet ministerial decisions are based on dubious calculations and outdated information. In a report published in 1984 entitled "The Impact on Local Authorities' Economy, Efficiency and Effectiveness of the Block Grant Distribution System" the Audit Commission said:
The existence of so many unresolved questions after four years experience of operating the Block Grant system also casts doubt upon the use of GREs for any purpose other than grant distribution. And it is evident that complexity has not, so far, produced a general perception of equity.
The report went on:
Unfortunately, the information used to calculate both the needs for local authority services and the availability of local resources is open to serious question.
That is the independent and considered view of the Audit Commission about one of the two principal tests on which the Secretary of State has based his decision to impose this order on the four authorities.
The order will place huge strains on the budgets of the authorities affected. There will be expenditure cuts for Merseyside of more than £44 million, for south Yorkshire of almost £28 million, for the Greater London council of almost £75 million and for the Inner London education authority of £57 million. I have received a copy of the letter sent to the Secretary of State today by the leader of ILEA, Frances Morrell, who leaves him in no doubt that there are serious questions to be asked about even the right hon. Gentleman's new limit for that authority and the limit's impact on the quality and scope of education in London.
All these cuts are made on the basis of the decision of the Secretary of State which, in turn, rests on a shambles of incoherent and failing Government policies. The arguments for the order are false and racked with contradictions. The performance of Ministers in dealing with local council policy is incompetent, dishonest and deplorable. The House should reject the Government's case.

Sir John Osborn: I assure the hon. Member for Copeland (Dr. Cunningham) that rates are driving businesses out of Sheffield and have been a perpetual cause of increasing unemployment. If the hon. Gentleman thinks differently, I assure him that many industrial leaders deplore the fact that I, as the only Conservative Member of Parliament in the region, have not been able to stop this drain and to persuade my hon. Friends to do something about it before today.

Dr. Cunningham: Given the hon. Gentleman's long experience in the industry, he must know, as I know from my association with the industry, that the devastation of

the steel industry as a result of the Government's policies has been the principal factor that has driven business from Sheffield.

Sir John Osborn: I shall now revert to the debate. If the hon. Gentleman would like me to talk about steel, I shall. I am afraid that if I do, not many hon. Members would have much chance of dealing with the subject of the debate. I shall therefore refrain from talking about steel.
The order arises from the Rates Act 1984. The order is, in fact, the Act put into practice, and that is happening none too soon for householders and those who run industries, commerce and businesses in the city and south Yorkshire. Today's debate covers familiar ground.

Ms. Harriet Harman: Will the hon. Gentleman give way?

Sir John Osborn: The hon. Lady should bear in mind the fact that if I am interrupted, I shall spend between 15 and 20 minutes on my feet and may prevent other hon. Members from speaking. I give way.

Ms. Harman: On the point about commercial rates, is it not the case that the link between unemployment rising and rates has not been proven? Does the hon. Gentleman not recognise that in low rate areas the rents on those commercial properties increase and, therefore, at the end of the day the amount spent on rents or rates is about the same. The money going into rates is at least ploughed back into the local community for services and jobs. When the money goes in increased business rents, it goes goodness knows where and therefore is not ploughed back in. Does the hon. Gentleman not accept that his argument about unemployment and rates is totally spurious?

Sir John Osborn: The hon. Lady should let me continue with my speech.
As the hon. Member for Copeland knows, the last Labour Government were concerned about the level of spending in south Yorkshire and Sheffield before 1979. I attended many meetings involving local councillors who were worried about what would happen under a Labour Secretary of State for the Environment. Since 1979, this Government have tried hard to control the increase in local authority expenditure grants. The targets and penalties have been designed to encourage moderation, and many authorities have co-operated.
We are dealing with those authorities that have resisted. For those few authorities encouragement has had to become compulsion. Those councils, and south Yorkshire especially, have only themselves to blame. They have tried to portray my right hon. Friend the Secretary of State in an uncompromising light by saying that they have not had sufficient time to make their case. The hon. Member for Copeland made that point. What rubbish! The high-spending councils have had too long to make their case. They have been making their case since 1979. The Government have a clear mandate to control the level of public spending. Local authority expenditure is about £33 billion, or a quarter of all public spending. Local authorities employ roughly one tenth of the total work force. It is daft to think that local authority spending is exempt. The hon. Member for Copeland, councillors and others think that their mandate has been invalidated by the control from Government that the order provides. Those arguments are based on the claims of local democracy.
There we move to the heart of the matter which was mentioned by my hon. Friend the Member for Leicester,


East (Mr. Bruinvels)—the link between the ballot box and the rating system has worn thin. Of every £1 spent by local councils on local services, less than 25p in the £1 is provided by householders. Slightly more than 25p comes from businesses and other non-domestic ratepayers and about half comes from taxpayers. That means that, in a city such as Sheffield, one out of every two households, or roughly one in four of those entitled to vote, pay full rates. Those who pay do not vote while those who vote do not pay. That is taxation without representations. What sort of a mandate is that?

Mr. Peter Bruinvels: It is not a mandate.

Sir John Osborn: Quite right, it is not a mandate. In previous debates I have said that I should prefer some form of rate reform, but consensus on that has not been possible. Something must be done now, and I therefore welcome the present measure.
In the Daily Telegraph last week Anthony Lejeune said:
The weakest point in the moral armour of modern democracy is that citizens can vote money for themselves out of the pockets of other citizens and are encouraged by politicians to do so. The most notorious current example is the unscrupulous use of the rating system by Left-wing local authorities.
At last something is being done to limit the damage that they cause.
Sheffield has suffered harshly in recent years at the hands of the city council and the South Yorkshire county council. Domestic rates in Sheffield have risen by 245 per cent. My right hon. Friend the Secretary of State for the Environment said that rates have risen by 132 per cent. in Yorkshire over the past six years. District and county councils have recklessly, deliberately and profligately ignored every request to limit their spending. Commerce and industry must welcome the introduction of rate-capping. They have seen the disastrous effects at first hand, and a survey by Sheffield chamber of commerce shows that 48 per cent. of the firms that cut their work force during the previous two years laid part of the blame on rates.
Sheffield has a tradition of heavy industry, and the rate burden is exceptionally heavy. The result is viciously circular. As businesses close, residents leave to avoid the high rates, and the declining rate base hits those left behind even harder.
It is no good pretending that those are not the effects of high rates. They are, and it would be an irresponsible Government who did nothing about it. Predictably, authorities designated to have their rates limited have produced scare stories of how that will decimate local services, and I referred to education earlier this afternoon. What an admission of poor management. South Yorkshire has been set a limit that requires the council to absorb the cost of inflation in next year's budget. Many a company in south Yorkshire and elsewhere would have been happy with such moderate cutting proposals during the recent recession, and I speak with some personal experience of the matter.
South Yorkshire will still be left to spend large sums of money—£178 million. In south Yorkshire the local authorities have spending targets which I calculate amount to £660 million for 1985–86. That is over £500 per head of population. That is solely local authority spending. It is rubbish to claim that such sums will result in the destruction of services and the neglect of statutory duties.

If my right hon. Friends the Secretary of State or the Minister for Local Government disagree with my figures, I hope that they will put the record straight. Last year, south Yorkshire county council spent over £90 million subsidising transport and recouped a bare £20 million in income as the Secretary of State said.
Is it unrealistic to suggest that there is room for improvement there? Spending on transport revenue support in south Yorkshire amounts to more than £45 per head. That is almost double the average for metropolitan counties. The total cost per head for the provision of all services is about £158 while the class average is £20 per head less. Even after rate capping the council will have plenty to spend.
As is widely acknowledged, the rating system is far from perfect and a review of all local authorities, finance is welcome. Today's measures are regrettably necessary. They will make the system a great deal less imperfect.
The Labour-controlled Sheffield city council and South Yorkshire county council have briefed Members of Parliament of all parties about their position. When Socialist councillors have been present at those meetings — the House must bear in mind that I am the only Conservative Member of Parliament at these meetings—they have interpreted the briefings as advocating that public expenditure, in itself, must be good.
As my right hon. Friend the Secretary of State has said, local authorities have spent money on nuclear-free zones and funds to striking miners. How can we be sure that they have gone to the families rather than to the pickets? They have financed CND conferences, and an anti-apartheid headquarters. They have politically appointed staff in town and county halls. These matters also involve Sheffield district council because it is a collecting agency.
My right hon. Friend's statement about an inquiry on abuse must be welcome. The reference to industry and commerce not backing the Government must relate to the rate support grant. I have a copy of a letter sent to my right hon. Friend from the Sheffield chamber of commerce. South Yorkshire and Sheffield have special problems related mainly to regional development. The level of GRE needed to cover a population that is aging because the young are moving out is a problem, but industry and commerce must work closely with county hall and the town hall. It is part of the process of living with local government as they find it. They must eliminate retribution if possible but above all they must attempt to make bad local government for industry and commerce better.
The Sheffield chamber of commerce—I have been a member of the council for some 30 years—does not want a militant confrontation involving county hall, town hall and the Government. That is why I should back it in seeking any negotiations with councillors.
Since the April tragedy at county hall in Barnsley many of the councillors, including the chairman of the police committee, George Moores, have been sponsored or closely connected with mining and the mining communities and objectivity has been lacking during the miners' dispute. They must surely have learnt that violence begets violence. The tragedy of the coal strike illustrates that.
I hope that moderation and common sense will prevail in relations between Government and local government. I appeal to South Yorkshire county councillors and the


district councillors to act sensibly and work with the Government rather than to continue to show defiance that they have shown for the past 10 years.
My right hon. Friend referred to the Blunkett letter. I have seen press releases suggesting that as leader of the Sheffield city council he may think differently from what I have hoped. I hope that the permanent officials and the councillors will accept the guidelines laid down by my right hon. Friend. I know that Conservative councillors on the county and district councils in south Yorkshire, including their leaders, County Councillor Irvine Patnick and Sheffield councillor David Heslop gave my right hon. Friends their full backing. They have advised me that, if anything, the measures come too late; they cannot come too soon. My right hon. Friend has the support of Conservatives in the area I represent.

Mr. Eric S. Heifer: When I hear Ministers speak from the Conservative Front Bench it increasingly reminds me of when I first became a city councillor in Liverpool, and was put on the children"s committee. At that time, the council was run by the Conservative party, and the lady who became our chairperson was opposed to central heating in the children's homes on the grounds that it was not good for them. Also, we decided to get some bicycles for the children, and we actually got that through. Then the lady said, "But don't forget that they must be second hand."
That is the penny-pinching, miserable attitude that the Conservatives have towards local government, but at least at that time we had the opportunity of determining how much we spent. We had the opportunity of explaining to the general public at the election what had happened and why they should get rid of Conservatives and put Labour people on the council. The local people took the decision. They had the right to decide. However, with this Government that right is, slowly but surely, stage by stage, being taken away from the people. We have the rate-capping procedures as well as the forthcoming abolition of all the metropolitan authorities, only because they are Labour authorities doing a good job for the people they represent.
The Secretary of State made great play of the extravagant overspending by the Merseyside county authority. He said that one of the dreadful things that it was doing was supporting what was called the "resident author" and giving money for a record against the police. He hinted that a certain amount of money had gone to support the miners. With regard to the police, one person who was constantly opposed to what the police were doing on Merseyside was Sir Kenneth Thompson, the old Conservative leader of the council. I read more letters in the local papers complaining about the authoritarian development of the police written by Sir Kenneth Thompson, than I have ever seen from any Labour man in my life. That was interesting. Even if a few bob is going towards a record, it could not possibly be in the same category as the opposition to what was happening in the police from Sir Kenneth Thompson.
The amount of money that might go into those peripheral things is very small. They are the things that Ministers pick out, use and exaggerate. No doubt there were Tories on the Nottingham city council who, many

years ago, opposed a grant for Torvill and Dean, yet because of that grant they become gold medallists in ice skating. Time after time we can give examples of such grants having been tremendously helpful to individuals and the nation, but Conservative Members would never understand that.
I should like to mention some of the problems that have arisen, for example on rate support grant. I have a table showing the changes in rate support grant for the Merseyside council over the past decade. In 1975–76, the Government grant was 66·5 per cent., and the ratepayers' contribution was 33·5 per cent.; in 1980–81 the Government grant was 61 per cent. and the ratepayers' contribution 39 per cent.; in 1984–85, the Government grant was 51·9 per cent. and the ratepayers' contribution 48·1 per cent.; and in 1985–86 the Government grant is 48·7 per cent. and the ratepayers' contribution 51·3 per cent. That is the truth about what is happening. When the Government talk about rates going up, they do not explain that they have gone up because the Government grant—the rate support grant—has gone down. Therefore, the local authorities have been faced with the prospect of cutting their services or giving the people a decent service and having to put the rates up. Then they are called extravagant overspenders. These are the wicked people—

Mr. Peter Bruinvels: Will the hon. Gentleman give way?

Mr. Heifer: I shall not give way. I shall speak for only 10 minutes because many hon. Members want to participate—

Mr. Bruinvels: But the hon. Member for Liverpool, Riverside (Mr. Parry) has gone to sleep.

Mr. Heifer: Even if my hon. Friend has gone to sleep, his contribution to the debate will be much greater than the hon. Gentleman's.
I should like to bring out what is really happening and the effect of the Government's proposals on Merseyside. I understand that the maximum precept that the county can raise is £219 million. The council's estimate for maintaining existing services is £242 million. Therefore, there is a gap of £23 million. The county council believes that the Government have got the figures wrong. I shall not argue at length because these are technical arguments, and hon. Friends who are members of the county council can argue that case better then I can. However, on the basis of the present situation, with the Government's decision and the £23 million gap, it is important to understand what would happen to vital and important services on Merseyside.
First, the county authority would need to reduce the amount available for the police by £5 million. In real terms, because of the financial relationship with the Department of the Environment, that amount would be £10 million. That could mean at least 700 to 800 policemen and women not receiving any payment. In the area crime is rising, drug usage is on the increase. A recent survey that we quoted in the House last week shows that policing in poorer areas is worse than it is in better-off areas, and the poor are getting a raw deal from the police service on Merseyside. The police are overstretched. More foot patrols are needed. It is absolutely absurd that the concil should be faced with that position.
Expenditure on the fire services would have to be reduced by £2·5 million. Expenditure on road maintenance would go down by £4 million. Anyone who goes around Merseyside now knows that the roads have deteriorated terribly over the past few years. They are getting worse because even now the money is not there as it should be. There would be a reduction of £1 million in expenditure on waste disposal.
The Secretary of State spoke at length about the passenger transport subsidy There would be a reduction in that of £8 million.

Mr. Barry Porter: So there should be.

Mr. Heffer: The hon. Gentleman, who represents Bebbington in Merseyside, is actually saying that the people of Merseyside should pay much higher fares than at present. He is saying, "Put the burden on the shoulders of those who can least afford it because they are the people who use the public transport." For my part, I believe that it is important that the ordinary people be given the opportunity of using public transport at a reasonable cost.
It is estimated that if the £23 million reduction were achieved it could lead to about 3,000 redundancies among the personnel of Merseyside council, and that is in an area with one of the highest levels of unemployment in Britain.
I do not know whether Conservative Members ever go beyond Watford. One or two may, but those who do not should go to areas such as Merseyside. I can tell the House why we do not have the problem of a Tory Member of Parliament. Unfortunately, Sheffield still does, but Liverpool does not. We have a semi-Tory in the hon. Member for Liverpool, Mossley Hill (Mr. Alton), who is not present at the moment, but we have no Tories because Liverpool has suffered under the Tory party over the years and it is fed up with them.

Mr. Peter Bruinvels: rose—

Mr. Heffer: I shall not give way and I have explained why.
The Secretary of State is right to say that the Merseyside council can increase the precept by 27 per cent. Nobody argues with that. But if it does, I am told by the county authorities that it would lose about £29 million from Government sources. That would mean a cut of £23 million for services over the period. It is in a catch 22 situation.
I hope that all hon. Members, including Conservative Members, who are concerned about local democracy and about stopping the trend towards increasingly centralised government, will come with us into the Lobby tonight and support my right hon. Friends on the Front Bench.

Mr. John Cartwright: The alliance Members will be voting against the order tonight, not because we necessarily endorse the spending levels or priorities of the authorities named in the order, but because we are opposed to the principle of rate capping. We argue now, as we argued during the progress of the Rates Bill, that it is inappropriate for Parliament to set the rate or precept of an elected local authority. That is the job of the elected councillors. If Members of Parliament take unto themselves the responsibility for fixing rates, there is no point in continuing to have elected local councillors in our town and county halls.
Nor do I accept that civilisation as we know it will be threatened if some local authorities spend more than the Government believe to be appropriate. Some local authorities have always spent more than the average and some have come to grief with their electors at the subsequent election. The level of rate that is charged by a local authority to its ratepayers is a matter between itself and the local ratepayers. If they do not like it, they will react through the ballot box in the traditional way.
It may well be that some Conservative Members will say that the current system of local government finance is not sufficiently accountable. There is some strength in that argument, but the response should be to make the system more accountable rather than to create some big brother in Westminster and Whitehall to lean over the shoulders of councillors and to second-guess their decisions.
Nor is it true, as was argued during the passage of the Rates Bill, that capping the high-spending authorities will automatically release resources for the traditional low-spending counties and other authorities which have stuck to the Government guidelines. If one doubted that, one has only to consider those cries of pain and bewilderment from representatives of the shire counties during the recent debate on the rate support grant. That underlines the fact that the low spenders in the shires continue to be held to low spending, despite the introduction of rate capping.
The second ground on which we shall oppose the order is that there are doubts about the basis of the precept limits in the order. For example, the original maximum precept allowed for ILEA in December 1984 was 74·19p and £44 million was to be taken from the ILEA reserves. The order raises the maximum precept to 77·25p and only £9 million is to be taken from reserves. The Secretary of State was good enough in his introduction to explain some of the reasons for that alteration, but we still do not have any disclosure of the assumptions surrounding the £9 million to be taken from the ILEA reserves. The same is true in relation to the GLC where £71 million is assumed to be available in its reserves for current spending. Again, there is no supporting evidence for that decision.
It is not good enough for the Secretary of State to tell the House that that sort of issue is between himself as Secretary of State and the councils concerned. The House is being asked to approve the maximum precepts in the order. We are being asked to make a judgment. I cannot understand how we can be expected to make a judgment without the available evidence being given to us of the sort of assumptions which the Secretary of State has made in relation to those reserves. We are being offered a straight take-it-or-leave-it decision. We are being asked to rubber-stamp the figures in the order. That brings the House into disrepute and it bears out the predictions and forecasts that some of us made in Committee on the Rates Bill.
Against that background, it is sad and regrettable that the designated authorities have not strenuously and vigorously argued their needs to the Secretary of State. I am not suggesting that they should have sought formal redetermination. I understand the risks that are involved in that course. But they should have taken the opportunity to argue their case with the Secretary of State and to demonstrate the flaws in the figures which he has put forward. That is a matter of regret because they have let down the people that they represent in not taking that opportunity.
One of the sad things about the whole business is the sense in which both sides — Ministers and local


councillors—seem to be more concerned with scoring points off each other and legally wrong-footing each other than about the future of the services which are under discussion. It is a case not just of extracting the maximum political gain but of safeguarding services which are vital to a great many people that we represent.

Mr. David Alton: Does my hon. Friend agree that cities such as Liverpool are being turned into "Confrontation Streets" with the longest-running soap operas and farces in local government? People are being used as pawns in a power game that is being played out over their heads. That means that in the long term ratepayers will be disadvantaged. It is sad that the hon. Member for Liverpool, Walton (Mr. Heffer) is not present to hear that point.

Mr. Cartwright: It would be unwise to involve myself too far in the internal politics of Liverpool. They are obviously dangerous politics and certainly bitter. I shall only say that the threat to refuse to levy a precept on the part of the authorities concerned is a threat to gamble with other people's jobs and services. That is a dangerous thing to do. If the gamble fails, many people will be without a job and will not have the vital services on which they depend. The money at some point or other will simply run out if no precept is levied.
One of the most worrying aspects about the way in which the rate-capping operation is being conducted is the fact that all rate-capped authorities will face the damaging impact of sudden cuts. For example, ILEA is being asked to cut about £66 million off its budget. If that cut were phased over a period, it might be possible so to organise it that damage to top priority services was limited. Instead, cuts will have to be made suddenly, in a hurry, and there will be no opportunity to look across the various spending areas and to try to protect the high priority services. When cuts have to be made in a hurry, they fall on whatever can be cut at speed, irrespective of priority. An education authority is likely to make cuts in books and equipment, not to fill staff vacancies wherever they occur, and to cut discretionary student awards.

Mr. Patrick Jenkin: The hon. Gentleman claims that those are the results of the way in which rate capping is being run. Does he not agree that ILEA has known its expenditure limits since last July? If it had taken a realistic view of the outcome of the ensuing process, it could perfectly well have made its dispositions months before it had to draw up a budget. We are not asking for a substantial cut in its present level of spending. The difficulties described by the hon. Gentleman are to be laid fairly and squarely at the door of the present majority party on ILEA.

Mr. Cartwright: The authorities concerned should certainly have argued their case with the Government. I would certainly take issue with those authorities which, far from trying to take account of reality, have simply planned to jack up their expenditure higher still. That will make the impact even greater, the cuts will have to be even sharper and the brakes will have to be slammed on at the last minute. I believe, however, that suddenly imposed cuts are inefficient, wasteful and harmful to the services.
There is another risk of chaos and of a dangerous impact on the services. It will arise if the precepting authorities

accept the maximum precept, and levy a precept on that basis, but are then unable or unwilling to face the necessity for the consequent spending cuts. Some authorities simply will not face that necessity. Others may not be able to do so, because of the political realities of the council chamber. There will then be a risk that spending commitments will not be reduced to meet the resources available. At some point during the year the money will run out and there will be chaos. The Secretary of State has not yet faced that risk. I am interested to hear how he believes that those who are dependent on local authority services can be protected against it.
A question mark now hangs over the edifice of local government finance erected in the past four years—the complex bureaucratic business of grant-related expenditure, targets, penalties, holdback, clawback and, finally, rate capping. As the Audit Commission pointed out, the complex paraphernalia does not save money. Indeed, there is evidence that it wastes money. The Cambridge university report makes it clear that the Government's aim of reducing rates does not have the impact on employment that they have claimed. The complex operations—the bureaucratic spider's web of controls on democratic local authorities—are not delivering the goods. The sooner we get rid of this complex, ramshackle and wasteful system, the better for local government.

Mr. Barry Porter: I am delighted to follow the reasonable gentleman from the Social Democratic party, the hon. Member for Woolwich (Mr. Cartwright). The order shows that, unfortunately, reasonable people do not necessarily exist in all the local authorities. I am sorry that the hon. Member for Liverpool, Walton (Mr. Heffer) has vacated his place after making a gesture by attending part of the debate. I have the advantage of having been here at the beginning, having listened to most of it and having remained awake for most of it, despite occasional temptations to the contrary.
The purpose of the debate depresses me. Such a discussion should be taking place in the town halls of Liverpool, Sheffield, Manchester, London and elsewhere. I have always advocated the existence of autonomous local authorities, rightly and proudly independent of whatever party happens to occupy Westminster. Unfortunately, that desire has not yet come to fruition. When I hear the hon. Member for Walton talking about local democracy, I wonder whether he approves of the mandate system in Liverpool whereby Labour councillors are told to vote in a certain way regardless of the arguments. That is not democracy. If the right hon. Gentleman had stayed to listen to the debate he might have been able to clarify his view on the question whether such a practice is democratic.
Under the present method of local government finance the taxpayer, via central Government, has become the major contributor to the expenditure of local authorities. There is an unarguable case for saying, therefore, that central Government should have a not inconsiderable voice in deciding how much local authorities can spend. In happier days I was the chairman of a local authority committee with considerable spending power. Central Government's voice— as it happens, it was a Labour Government — was exercised by persuasion and suggestion, and in the end common sense prevailed. Ultimately, the local authority accepted the right and


indeed the duty of Government to deal with the interests of their overall economic strategy — in which local authority spending plays such a large part—and of the taxpayer. It never entered my mind to question the right and duty of central Government. Over the past few years, the accepted practice has been challenged. That has happened—I hate to say this—not so much for financial as for political reasons. The Act behind the order has become a disagreeable necessity. No Conservative—certainly no Conservative with a local authority background — would have wished that to happen. However, the measures have become clearly necessary and they have my support. No Government of any colour would welcome such a turn of events, but all Governments have a clear duty to ensure that their calculation of a proper total of local authority spending is adhered to.
The authorities with which we are dealing have chosen, first, to ignore their clear constitutional relationship with central Government and, secondly, to spend ratepayers' and taxpayers' money with the gay abandon of the financial alcoholic. None could be worse than the peculiar Socialists who control in their own fairyland the finances of the soon-to-depart, wholly unlamented, Merseyside county council.
The pronouncements of the Merseyside county council are less overtly dramatic than those of the GLC and the London boroughs who continue to astonish the nation. However, they are no less dangerous for that. The principal reason for the high level of spending by the Merseyside county council, which some Opposition Members consider to be a matter for great pride, is the revenue support for bus and rail services. There is an argument for subsidising those activities, but in 1984–85 the council spent £44 per head of population on support for buses and trains, over and above what it paid for free travel for pensioners. Expenditure on those services was 80 per cent. above the average of the metropolitan counties. The council has adopted a policy of taxing the ratepayers, many of whom — including many of my own constituents — are not at all well off, in order to subsidise the users of public transport, who may or may not be well off, and also to provide plenty of jobs for members of the Transport and General Workers Union. In that year, the council also spent £80,000 on propaganda which will, it hopes, prevent its abolition.
Those of us who live on Merseyside have seen the extravagant posters that show the fire service going down a plughole invented by the Government, the police going down a plughole invented by the Government, everything going down a plughole invented by the Government. It is utter nonsense.

Mr. Wareing: There are 50,000 unemployed.

Mr. Porter: That is not the point. I have mentioned the subsidies given to transport and I listened to the figures that the hon. Member for Walton gave. Even he must realise that there can be counter-balancing operations within a legal precept for Merseyside county council which would enable services to be provided at a reasonable cost without local people noticing that there had been any change. I am inspired by the people of Merseyside who treat the publicity campaign of the council with a proper and studied indifference.

Mr. Alton: Does the hon. Gentleman agree that perhaps most disreputable of all is the implication that has

been given to pensioners on Merseyside that, as a result of abolition of that council, they will lose their bus passes? Does he agree that that has caused considerable distress and disquiet?

Mr. Porter: I am obliged to the hon. Gentleman for that reminder. That is fairly typical of the publicity being promoted by the hon. Member for Walton and his friends. It is utterly untrue. Such issues will be a matter for the district councils to deal with when they succeed the county council. Whatever the rights and wrongs of the activities of the county council, how can it be right to spend nearly £1 million on such publicity material? The money should be spent on things that are of much more use to the people whom the council purports to represent.
People who live in the Merseyside county council area will welcome the order, as will Wirral district council. We would also welcome a decision from the Government about the methods of finance for local authorities to make those that spend accountable to local opinion and voting power. I heartily support the order and I hope that it will be only an interim step in progress towards a new and highly desirable local democratic system. In the meantime, I am happy to support the Government putting some form of straitjacket around the politically and financially mentally disturbed who, at present, are a burden on my constituents.

Mr. Bill Michie: I have listened to the whole of the debate and to the exchanges on the statement that preceded it. I am worried that, because of the three-hour limit on the debate, some of my right hon. and hon. Friends will not have an opportunity to put the case for their areas.
I should like to dissociate myself from what the hon. Member for Sheffield, Hallam (Sir J. Osborn) said. He makes his own minority speech and often gets the facts wrong because he is still not aware of what is happening in areas such as Sheffield and south Yorkshire. Unlike me, he has never been on the city council. I have been a member for 15 years and remain one. However, I admit that he has experience of the steel industry, as he was a manager for many years. That company was running down long before the rates issue was thought of.
South Yorkshire county council and Sheffield city council have suffered drastically because of the reduction in grants and because of penalties in the past few years. Such reductions affect everything and even run contrary to many of the projects which the Government have encouraged. Sheffield city council is one of the 23 programme areas and we have six partnership authorities where deprivation is considered to be especially severe. All those authorities get annual allocations of money from the Department of the Environment to fund schemes that have an impact on conditions in their inner areas. The House is probably aware that 75 per cent. of the allocation is met by the Government and the remaining 25 per cent. must be picked up by the local authorities.
The problem is that, because grant has not increased in the past few years, the council is penalised on the 25 per cent. that it must pay. If Sheffield had taken more of the grant from the Government, it would be outside the trap. It is being penalised only because it has used less grant. The same is true of south Yorkshire. It is a pity that the


hon. Member for Hallam is not here as he is a member of the chamber of commerce in Sheffield and I should like to quote a letter that it wrote. It said:
It is a matter of continuing concern that expenditure both on the Urban Programme itself and on 'time expired' projects are subject to Block Grant penalties. This appears to us inconsistent with the Government's objectives in promoting the Urban Programme, and we shall again be making representation to the Government to try to have this anomaly ended.
That is not the comment of a rabid Left-wing organisation, but it recognises the discrepancies.
For the county council, the block grant system, complete with expenditure targets and grant penalties, was introduced in 1981–82. In each year since then, the council's block grant entitlement has been cut. The proportion of the council's spending which is supported by the Government has fallen from 58·8 per cent. in 1980–81—the year when the new system was introduced—to 48·7 per cent. in 1985–86. That represents a reduction of £56 million in the council grant and means an extra 13p on the rate precept for 1985–86. That burden must be carried by the ratepayers, the very people whom the Government claim to be helping.
Opposition Members are proud of and will defend the services provided by local authority work forces. Too much is said about local authorities featherbedding their staff. I have much experience in these matters and believe that the work force does a tremendous job under enormous strain. We defend their right to give their best. We will defend the right of plumbers and joiners to get on with the job instead of having to look over their shoulders to see whether their job will be there at the end of the year. We will defend social workers who should be looking to their clients rather than looking over their shoulders to see whether an old folks' home that they are trying to get somebody in is about to be closed. Teachers should be concentrating on their classes and not worrying about whether expenditure is being cut so much that they must buy their own chalk and their pupils' parents must buy books — one of the recommendations of the hon. Member for Hallam. He said that in five or 10 years' time parents and kids will have to pay for their own books, such is his affection for the bad old days. He got his comeuppance from his supporters in Hallam on that.
I must correct my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) who said that bus fares were subsidised to help poor people. In south Yorkshire, poor and rich people use the bus service and defend the council's policy of subsidising it. They do not regard the council as extravagant but as providing a service that is worth maintaining. It protects the environment and the value of land that can be used for other developments. It is nonsense to suggest that the rich are subsidising the poor. The subsidy is enjoyed and supported by all. It is value for money.
I should like to conclude by quoting not a political party but John Banham, the head of the Audit Commission for local authorities in England and Wales. He said that Sheffield was one of the best-run authorities in the country in terms of providing value for money. He continued:
There is no question that there is a great deal that other cities have to learn from this place.
He felt so strongly about this point that at a press conference—not behind doors or in any attempt to hide it—he said:

… poor distribution of rate support grant meant that industrial northern cities like Sheffield were not getting the contribution from central government that they needed.
The argument is not about whether there should be efficiency drives in local government. I just wish that we had one in central government—that would be a turn-up for the book. We are arguing about the rights of duly elected local authorities to run their cities in the way in which their citizens want them to be run. We are arguing that unless they are given that right, and unless a proper assessment is made of their real needs—that has never been forthcoming from the Government — there will always be problems, the ratepayers will suffer and those in need will suffer even more.

Mr. Guy Barnett: In opening the debate, the Secretary of State claimed that the order that he was placing before the House was designed to protect the ratepayer. I do not propose to dilate on that for long. It is arguable that that is his main responsibility, particularly when central Government expenditure under this Government is very much open to criticism. Perhaps he should look at his own housekeeping rather than interfere in the housekeeping of local authorities that are also directly elected. If he considers that it is his responsibility to protect the ratepayer, as he clearly does, he has another responsibility that he must take on board and which he never admitted in his speech.
I wish to speak on behalf of the Inner London education authority. In that connection, the Secretary of State never mentioned the responsibility that he must take on board, if he believes that it is his responsibility to protect the ratepayer, to safeguard the education of the children of London. That responsibility he has not admitted in the House.
It is important for the House to recognise, as did my hon. Friend the Member for Copeland (Dr. Cunningham), the severe damage that the Government have done to the relationship between local and central Government. It is interesting to record that at the Conservative party local government conference in 1979 the Prime Minister said:
Good Government rests on a partnership between Whitehall and Town Hall.
I agree with her. I believe that that is something for which the last Labour Government were attempting to make provision. We worked hard to this end in the Department of the Environment, and I am proud of the relationship that existed between local and central Government. One reason for its success was that in those days the system of multiple regression analysis admitted in the way in which the grant was determined that local government had an authority as well as central Government.
Relationships between local and central Government will always be difficult or in need of careful co-operation, as the Prime Minister remarked in her speech in 1979. It will be difficult, for two reasons. The first is that local and central Government are both directly elected. The second—and this is the important point—is that they both have an authority. Central Government have a general responsibility for the economic policy of the country, but local authorities are responsible for running services.
The only body in inner London that has a responsibility for running education is the Inner London education authority. It is charged by law to do that job and to determine the education needs of London.
My impression in listening to the Secretary of State and to some of the remarks that emanate from the Department of Education and Science is that they do not know or understand the problems with which ILEA has to cope. The grant-related expenditure system that the Government have invented to decide how much local authorities should be allowed to spend does not take account of the factors in inner London which, by any standard, must greatly increase the cost of running education in inner London.
For example, there are no fewer than 147 mother tongues in inner London. That can be described both as a problem for ILEA—and it is a considerable one—and as a great opportunity. If the children in London with their many different backgrounds and languages are educated in their mother tongue and in English, in years to come this might grant to London an enormous advantage. It could be an international city with a considerable proportion of its citizens genuinely billingual. No account is taken of this in the Government's assessment of expenditure.
No account is taken of the fact that London has many old school buildings. Half of London's secondary schools are old buildings which are expensive to heat and to maintain. There are also higher land and building costs of one kind and another. The population density in inner London is another factor that is ignored in the grant-related expenditure assessment. In addition, there are many children in inner London whose parents are on supplementary benefit. Those examples demonstrate the extra costs that are borne by ILEA.
Unless the Government understand the factors that contribute to the relatively high budget that is necessary in inner London, they will be capable of doing serious damage to education in inner London.
There is a good deal of evidence of the cumulative effect of multiple deprivation. Bearing in mind—and this is based on the figures of the Department of the Environment—that seven out of the 10 most deprived local authorities in the country are in inner London, one realises the serious problems faced by ILEA. In some recent research, an examination of the children in schools as opposed to the population of all age groups demonstrated the high measure of deprivation. A single-purpose authority like ILEA is therefore coping with probably greater problems than even it may recognise.
These factors must be taken into account. The Government are going down a dangerous road. If they attempt to impose a rate cap or precept cap on ILEA, they could do immense damage to education in inner London because of their relative measure of ignorance of the extent of the problems with which ILEA has to cope.

Mr. Dobson: Would my hon. Friend agree that it is somewhat ironic, following the publication of the Hargreaves report, which was sponsored by ILEA and commended by the Secretary of State for Education and Science, that the Secretary of State for the Environment should now be making sure that ILEA will not have the resources to implement the report to improve standards in secondary schools in inner London?

Mr. Barnett: I agree with my hon. Friend. I welcome the Secretary of State's reaction to that report. It is one of many examples, including Her Majesty's inspector's report, showing the high regard in which ILEA is held by officials in the Department of Education and Science, although it is charged with extravagance and every possible sin by the Department of the Environment.
For those reasons, I believe that the Government's proposal today is dangerous and irresponsible. I deeply regret the steps being taken and the collapse in relationships between central and local government that has characterised the Government's period of office.

Mr. Richard Holt: I agree very much with the hon. Member for Greenwich (Mr. Barnett) about the change in relationships between central and local government. When I was first elected a councillor in the London borough of Brent 22 years ago I could make an appointment with the town clerk and see him within two or three days if he was free. Every member of the council, irrespective of political persuasion, sought to carry out his duties with a dignity that no longer exists. In those circumstances, it is inevitable that there has been a breakdown in relationships, and it is very much a political breakdown. The Labour party is pleased that it has succeeded and that the relationships that previously existed have broken down. I speak from more than 20 years' experience in many local authorities, having served on a London borough council for 10 years, led a district authority in the south and later served on a shire authority. I now represent an area in the north-east with Labour-controlled county and district authorities. I can thus see very clearly the differences in attitude and in the way in which local government is conducted.
In the north of England rates are comparatively higher than in the south, with the result that job opportunities are far greater in the home counties than in the north-east. The Opposition have argued that there is no correlation between rates and jobs, but the Teesside Small Business Club—

Mr. Deputy Speaker (Mr. Harold Walker): Order. I hope that the hon. Gentleman will not tempt the House to go beyond the terms of the order, which relates to the Merseyside and South Yorkshire metropolitan councils, the Greater London council and the Inner London education authority. A large number of hon. Members from those areas wish to speak on matters covered by the order.

Mr. Holt: I am fully aware of that, Mr. Deputy Speaker. My charge against the Government is that the order does not go far enough. The Cleveland business community wants to know why Cleveland has not been rate-capped and included in the order. [HON. MEMBERS: "Wait till next year."] By next year the Conservatives will have taken control of Cleveland. Only this week they put forward a very sensible amendment to the budget ro reduce the rate increase from £2·10 to £1·80. That kind of change—

Mr. Dobson: On a point of order, Mr. Deputy Speaker. Surely the hon. Gentleman is out of order in discussing rates in Cleveland and inviting rate capping for that authority. That is in no way germane to the matters under discussion. Numerous Opposition Members have left the Chamber because they see little prospect of getting into the debate.

Mr. Deputy Speaker: It is ingenious of the hon. Member for Langbaurgh (Mr. Holt) to try to argue that his authority should have been included in the order, but if that argument were accepted we should finish up discussing a very large number of authorities. I hope that hon.


Members will confine their comments to matters covered by the order — the Merseyside and South Yorkshire metropolitan councils, the GLC and ILEA.

Mr. Holt: I accept that, as yet, there is nothing in the order about Cleveland, but the general tenor of the debate so far has concerned the relationship of central Government and local government per se. It therefore seems not unreasonable to draw upon practical examples from Cleveland—

Mr. Deputy Speaker: With respect to the hon. Gentleman, those matters were fully discussed when we considered the Rates Bill of 1984. The hon. Gentleman's comments would have been most appropriate then, but I very much doubt whether they fit into the subject of today's debate.

Mr. Holt: With great respect, Mr. Deputy Speaker, the report in The Guardian to which the Opposition have referred was not confined to the four local authorities covered by the order.

Mr. Deputy Speaker: The House is not discussing any newspaper report. It is discussing a statutory instrument — the draft Rate Limitation (Prescribed Maximum) (Precepts) Order 1985. I hope that the hon. Gentleman will address himself to that or resume his seat.

Mr. Holt: With great respect, Mr. Deputy Speaker, Mr. Speaker himself was here when the Opposition raised the subject of the relationship between jobs and rates and the report that appeared in The Guardian. I wish to counter the argument advanced before you, Mr. Deputy Speaker, took the Chair. The business community in Cleveland would have liked rate capping to apply in that area so that the imminent loss of jobs could be avoided. It would be wholly irresponsible of me not to speak on behalf of the Cleveland business community while the order is still before the House in case I manage to persuade my right hon. Friend the Minister for Local Government to consider rate-capping Cleveland. The House will be interested to hear of the situations that have arisen in that Socialist Utopia, but before going off on that I wish to show that the result of this year's rate increases in my county—

Mr. Straw: On a point of order, Mr. Deputy Speaker. I know that you wish the debate to range as widely as possible and you have been generous to my hon. Friends, but it is surely out of order to speak about the rates in Cleveland.

Mr. Deputy Speaker: I do not want the debate to range as widely as possible. I want it to be about the order before the House. I hope that the hon. Member for Langbaurgh will either address himself to the order or resume his seat and allow an hon. Member who intends to follow the rules of procedure to take part in the debate.

Mr. Holt: The Labour party is obviously frightened to hear what I have to say. I will talk about Brent instead. I hope that I shall not be ruled out of order if I talk about a local authority within the London area. May I have your ruling on that, Mr. Deputy Speaker.

Mr. Deputy Speaker: The hon. Gentleman has not yet given me anything on which to rule. I assume that if he

discusses Brent in the context of the order his comments will be in order, but I shall have to wait and hear what he has to say.

Mr. Holt: Thank you, Mr. Deputy Speaker. Brent is very much affected by GLC actions. As a result of the change to Conservative control this year, Brent will not have a rate increase on top of the GLC precept—

Mr. Dobson: On a point of order, Mr. Deputy Speaker. The rates levied by the Brent authority, whether Tory, Labour or Bob's your uncle, are not the subject of the order before us today.

Mr. Deputy Speaker: The hon. Member for Holborn and St. Pancras (Mr. Dobson) is right. I hope that the hon. Member for Langbaurgh (Mr. Holt) will address himself to the order or give way and enable another hon. Member to speak.

Mr. Michie: Further to that point of order, Mr. Deputy Speaker. To help the situation, should we not be kind and give the hon. Gentleman two minutes because he has obviously brought the wrong speech?

Mr. Holt: The ratepayers of Brent, whether they are precepted by the local authority or the GLC, will have to pay the rates. The sum that they will have to pay is less because they are now in a Conservative-controlled borough. The order, which rate-caps the GLC, will assist them, and businesses in the Brent area will be infinitely better off than under the previous authority. That change of political control is without any diminution of services although, I admit, there may be no contribution to the London Lesbian Line or the Women's Police Bus Cooperative. I regret that when the Labour and Liberal parties in Brent got together they produced a poster for a dance, which shows two men dancing together. Perhaps that is what the Labour and Liberal parties want to do with each other.
The order is the first step along what I hope will be a long line of sensible measures introduced by the Government, which will follow the example set in this order, which provides for four local authorities to be rate capped, and rightly so. I look forward to the day when I can speak properly about the fact that Cleveland authority should be rate-capped. However, I shall be denied that pleasure because it will go Conservative in May and as a result will not be rate-capped.

Mr. Robert N. Wareing: The attack now being made on many metropolitan counties, including Merseyside county council, is not based on rational criteria. The Secretary of State's argument that ratepayers on Merseyside need protection is a new one for Secretaries of State for the Environment in this Government. The real reason why ratepayers in Merseyside have suffered during the past few years is because since 1981 the rate support grant to Merseyside county council has been reduced by £74 million. But the council has lost much more than that, because the Government introduced their mystical GRE assessment, which was condemned by the Audit Commission, which the Government appointed. The Government have made targets of a purely hypothetical kind, which have been set by civil servants in Marsham street, whose knowledge of the northern parts of our country, especially of


Merseyside, must be extremely slight—about as minute as the Prime Minister's and the Chancellor of the Exchequer's knowledge of modern economics.
The result of those mythical assessments and hypothetical targets has been penalties to the tune of £76 million being imposed on Merseyside county council since 1981. Under successive Secretaries of State for the Environment since 1981 total grant loss has been £150 million — almost the average total annual budget of Merseyside. Incidentally, 1981 was the year when Labour became the majority party on the county council.
The Secretary of State said that Merseyside county council was spending heavily. Following the Toxteth riots in Liverpool in 1981, one of his predecessors, the present Secretary of State for Defence, addressed the Conservative party conference at Blackpool and pointed out that the problems that gave rise to the riots could be dealt with only by increased public expenditure. That is precisely what Merseyside county council has attempted to do. It has injected millions of pounds into the area to create jobs, and to save and generate small business enterprises.
As a Merseyside county councillor I do not apologise for spending more than £40 million in the years since the Labour party came to office to generate 8,000 new jobs in the local economy. I do not apologise for a penny that was spent in the take-up campaign to ensure that more money was injected into the economy by telling people what their social security rights were. I do not apologise for the campaign being conducted for better pay for the low paid. We should campaign for more money to be injected into the economy. The cost-effectiveness of our policies on Merseyside in creating small business enterprises has been far greater than the regional policy of successive Governments.
The precept for Merseyside for the current year is 65p in the pound. The gauleiters in Marsham street are telling the county council that it should impose 82·8p in the pound. As I pointed out, that is a 27 per cent. increase. The Secretary of State has not addressed himself to the fact that if the artificial target of £219 million, which he set, is adhered to by Merseyside county council, there will be a 10 per cent. cut in the budget. That budget covers only current developments, not new ones. It pays for what is, and not for what many people believe should be. The Secretary of State asks for a 10 per cent. cut but a 27 per cent. increase in the rate precept. Where then is the famous Tory argument about the need for value for money?
My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) pointed out that 700 policemen may have to be dismissed to meet that cut. It is ironic that last year the Home Office approved £100 million expenditure by Merseyside police authority and was willing to provide the 50 per cent. grant to maintain and improve policing standards in an area which needs more adequate policing. But the Department of the Environment said, "We approve only £88 million. If you spend £100 million, which the Home Office has approved, and for which it will supply a grant, you will be £12 million overspent." To meet that overspend, it cost the county council an additional £18 million.
The hon. Member for Wirral, South (Mr. Porter), who is no longer present—he has probably returned to finish what he was doing before he strolled into the Chamber — was alarmed at the sums being spent on public transport. He read from the central office brief, which I have — it is not only Labour councillors who allow

documents to go astray. The document says that ratepayers are being taxed heavily to subsidise the buses. What the document does not say is that after 1981—the policy was found to be correct in a case before the High Court when the county council was prosecuted by General Universal Stores—for the first time in more than 12 years, there was an increase in passenger usage of the buses on Merseyside. In the constituency of my hon. Friend the Member for Liverpool, Riverside (Mr. Parry) and in parts of my constituency, 75 per cent. of the population do not have the use of a private motor vehicle. Indeed, many are recipients of DHSS benefits.

Mr. Eddie Loyden: Does my hon. Friend recall the way in which the large stores in the city reacted commendably when increased trade was brought about the greater mobility of people caused by the metropolitan county council adopting a "fares fair" policy?

Mr. Wareing: I am obliged to my hon. Friend for that intervention. The stores committee, which opposed our transport policy in 1981, is now our firmest ally on this issue, and it wants the cheap fares policy to continue.

Mr. Robert Parry: Recently the stores committee made it clear that if there was a heavy increase in rates in Liverpool, many hundreds of jobs would disappear.

Mr. Wareing: That committee is learning the real reason why rates have increased. The blame lies at the door of the gauleiters in Marsham street, not at the door of the councillors of any party that has been in control in Liverpool. I would like to be a fly on the wall when the Secretary of State meets the Conservative group on Merseyside county council next Friday. I am sure that those councillors realise that, despite political differences—there are some politically sensitive areas in Liverpool— the order will not deal with the real problems of Merseyside. The Secretary of State should consider more disregards.
If the council cuts the fire service budget by 10 per cent., four fire stations on Merseyside will have to close. There is the possibility that 3,000 jobs will be lost in an area of great deprivation. There was a time when the Tory party chided the Labour party for believing that the man in Whitehall knew best. But we have gone full circle. Merseyside has many social needs, a great problem with drug abuse—Merseyside police have only eight officers in their drug abuse squad — a declining port industry, and more than 50,000 people who have been out of work for well over a year. Where do the civil servants in Marsham street put those factors when they are making their calculations? They are completely ignored.
The Government believe in public expenditure cuts, and that is the real exercise here. By 1986–87, local authorities will have a shortfall of £2·3 billion if they are to maintain their existing services. The Secretary of State should talk to his right hon. Friend the Secretary of State for Defence, who was Secretary of State for the Environment at the time of the Toxteth riots, and ask him how he gets money from the Cabinet. When the Trident programme was introduced, we were told that it would cost £4·3 billion, but last week, taking the exchange rate of June last year, we were told that the cost would be about £10 billion. Everyone knows that it will cost at least £12


billion. The Government can find money for Trident, but they cannot find money to deal with the social problems of the area that I represent. But the people of Merseyside will not work with a pistol at their heads. They will defy the Minister, and he will have to negotiate with them, as there will have to be negotiations to solve the problems of other areas.

Mr. Tony Banks: This rate-capping order is a further step towards centralised and authoritarian Government, and towards the destruction of local government democracy and accountability. Scarcely a week goes by without the House becoming more and more enmeshed in the day-to-day affairs of local government. At present, things are relatively easy for the Government, because they are merely setting up the machinery of control. The real problems will arise when that machinery is operated. In the not-too-distant future, hon. Members on both sides of the House will be so sick of being asked to decide about local government minutiae that there will be a major revolt against the Government.
The Government have clearly abandoned their previous promises to take Whitehall off the back of local government and to replace the domestic rating system. The Government and the Secretary of State stress the economic case for ever-increasing control over local authorities, but their real motivation is a political one, based on party political malice. Rate capping and the abolition of the GLC and the metropolitan county councils arise directly from the intolerant, bigoted and dictatorial attitude of the Prime Minister. To her, all opposition is anathema. To her—she said this in her Carlton house speech—there is no difference between Left-wing Labour councillors and international terrorists. That was an insult to all democratically elected local councillors.
The Prime Minister lives in a world of dangerous self-deception and increasing fanaticism. To her, everything is either right or wrong, and she is always right. To strengthen that self-deception, she surrounds herself with political eunuchs who lack principles, honesty and self-respect.
The Secretary of State talked about high spending in Labour-controlled London boroughs, but he should be honest enough to tell the House and the country that about £3,000 million has been removed from London's rate support grant between 1980–81 and 1985–86. The reduction from 60 per cent. to 48·7 per cent. in central Government support for local government since 1978–79 represents a massive switch from national taxation to local taxation. The Government are also using nationalised industries to charge artificially high prices to extract taxation from ordinary people.
Labour-controlled local authorities have tried to defend themselves against the legalised robbery of the withdrawal of rate support grant. But the Government say that those authorities are spendthrifts, and they talk about extravagance. My hon. Friend the Member for Liverpool, West Derby (Mr. Wareing) hit the nail on the head when he mentioned Trident. Its cost has increased from an estimated £4,500 million in July 1980 to about £11,000 million in January 1985. What would the Secretary of State have said if a local authority had got its capital expenditure programme so wrong that it more than

doubled during five years? His hon. Friends would have been jumping up and down blaming incompetent financial management in local government. The incompetent financial management is not there, but in central Government.
The Government say that the local government overspend of about £770 million imperils their economic strategy. That is a bit of a joke, because we do not believe that the Government have any economic strategy. That £770 million represents less than 1 per cent. of total public expenditure. If only the Government could get their central financial programmes accurate to less than 1 per cent. of a margin of error, they would have something on which to applaud themselves. However, they are wildly overspending in terms of their capital and revenue programmes. Then they have the cheek to turn around to Labour-controlled local authorities trying to defend themselves from central cuts and call them extravagant and spendthrift.
Overspend is a matter of opinion rather than an economic tool. The GLC, which has always been described by the Secretary of State as an overspender, found that, because of a sleight of hand in accounting, its target was increased by 63 per cent. from last year to this year. Therefore, at a stroke, a massive amount of so-called overspending was written off by the Government.
The Minister made another point that was echoed by Tory Members, which was that high rates destroy jobs, and Treasury Ministers regularly parrot that. The hacks of Fleet street in Tory rags such as The Sun, the Daily Mail and the Daily Express continue to write about it all the time, but the fact is that it is simply not true. The London Chamber of Commerce, for example, in a report that it produced in June 1983, found that rates ranked last of seven costs identified as important by London firms. It found that rates came after labour costs, payroll taxes, bank charges, other taxes, rents and transport.
As the Secretary of State knows, we have now seen a copy of the report commissioned by the Department of the Environment from the University of Cambridge. It is a most exhaustive report examining the correlation between rates and jobs. It examined every district in England and Wales, and found that there was no connection between rates and jobs.

Mr. Holt: On a point of order, Mr. Deputy Speaker. I realise that this puts you personally in a difficult position. However, earlier, when I was speaking on this point, your predecessor in the Chair, the Chairman of Ways and Means, ruled that I was out of order in seeking to refer to the report that the hon. Member for Newham, North-West (Mr. Banks) is now referring to. If it was out of order for me to do so, it must be out of order for him.

Mr. Deputy Speaker (Sir Paul Dean): The Chair is indivisible in these matters. It is important that we keep within the rules of order.

Mr. Banks: I could not agree more, Sir Paul.
However, the Government gave as their justification for their rate-capping order and the precept limitation order on ILEA and the GLC the impact of high rates, as they see it, on jobs. This report, commissioned by the Department of the Environment, shows that there is no such correlation. Therefore, the report should be made widely available to hon. Members. I want to hear the Secretary of State try to refute the large report that his Department


commissioned, and that destroys one of the major points of the Government's case for rate-capping and this precept order.
The Government's policies are responsible for the gross overspending in the economy and for the, destruction of jobs, and not the rates, town halls or county halls. It is about time that the Secretary of State got honest, and started to admit this fact to the House.
The GLC's expenditure limit is to be £785 million, with a precept limit of 36·52p. Will the Secretary of State provide the House with information on how he calculated that precept limit? As far as we can work out, either he or a bunch of his civil servants plucked it out of the air. They assumed GLC reserves of £71 million. Where did the Secretary of State get that figure? That is not a figure that the GLC can recognise. Speaking as a member of the GLC, I do not think that it has reserves like that. The Secretary of State then says that if we tell him what our reserves are he will tell us what he will do about it. The GLC members have said that, before they are prepared to have talks with the Secretary of State, he should tell us how he arrived at the figure of £71 million for the reserves. What does he define as reserves? The answer to that might give us a clue as to how he arrived at the figure.
I ask the Secretary of State to address himself in particular to the issue of non-uniform rates. The GLC's statutory responsibilities vary in different parts of London. For example, it is responsible for magistrates courts only in the outer London area. Accordingly, the precept varies and in practice there are five separate precepting areas within the Greater London area. The Secretary of State has provided no information on the way that the maximum precept of 36·52p in the pound is to be interpreted within the separate accounts of the council, which it is required by statute to maintain for each of the precepting areas.
In a letter of 14 January, the Department of the Environment expressed the view that it would be lawful to levy a precept in excess of the prescribed maximum in some precepting areas. The Rate Limitation (Non-Uniform Rates and Precepts Limits) Order 1985, laid before the House on 23 January, confirms this position. However, the GLC's provisional legal advice, provided by Roger Henderson, QC, suggests that no precept should exceed the maximum, and that the statutory instrument may be ultra vires. I hope that when he replies, the Minister for Local Government will tell us the position of the GLC and the application of non-uniform rates within the Greater London area.
What will happen if ILEA stays within its existing budget? Will the Secretary of State be taking over ILEA? These are the practicalities of the order. The Government are bogging themselves down in a morass of local government finance, and they will live to regret the day.

Mr. Simon Hughes: I declare an interest, which I share with some other hon. Members, in that I pay rates to two of the four named authorities—ILEA and the GLC. As the Secretary of State reminded me earlier, under these orders, I stand to benefit personally. I shall have a third benefit if he goes ahead with rate capping for my borough, and Southwark is also prevented from levying the rate it would wish to. However, that does not change my view that rate capping is unprincipled and that redetermination of rate limits would have been the wrong way forward.
What we are witnessing tonight on these four authorities is the second part of a pincer movement. The first part was the reduction of their rate support grant. Having reduced what they received, the second part is reducing what they can require people to pay to them. The authorities are caught from both ends, and the money is not made up in other ways or by money from other sources. They will be short of money.
The Secretary of State knows that I do not hold any brief for the most substantial part of local government finance coming from the taxpayer. I do not believe that, just because the rate support grant was at 60 per cent., that should always be the level. Local government expenditure should, where it can be, be raised and spent locally.
Encapsulated in this order, however, is a tale of arbitrariness, full of assumptions, and of removing accountability. I criticise the arbitrariness, the assumptions and the removal of accountability.
The Secretary of State has never explained the arbitrariness of the choice of the 18 authorities, four precepting and 14 others, that he has chosen to be rate-capped. He has never explained why only those authorities with an expenditure of 4 per cent. above target, itself arbitrary, and 20 per cent. above GREAs, themselves arbitrary, should be the group chosen. There is an artificial cut-off point. We all know that, if he had altered the criteria slightly, more Tory authorities would have been included and there would have been another grouping based on an equally arbitrary basis.
One of the results of this arbitrariness affects ILEA in particular. Its budgetary year runs for 12 months from September. Although it will be rate-capped for the coming financial year, its funds are committed for the current academic year. Therefore, what is now a 6 per cent. cut becomes in reality a 10 per cent. cut for ILEA in the coming year.
There are also many assumptions that the Government can be shown to have got wrong. One is the Government's understanding of the effect of rates on businesses. In terms of the psychology of the business man, high rates do matter, but the reality is that they are not nearly so severe a penalty or imposition as the Government always claim. Another of the Government's assumptions, about waste and about the advantages of their system of financing, was disproved by the report of the Audit Commission last August. That report was much heralded but brushed under the carpet as soon as it came out with the wrong conclusions.
We need to know what assumptions are made about the reserves when the facts have not been made available. Southwark is proposed to be rate-capped. When we debate that proposal before long, will the Secretary of State assume that a reserve is available in Southwark which can be brought into his calculations? The Secretary of State's announcement in December did not make a specific assumption about this authority. We need to know the figures; otherwise I make the same criticism of the Government as I make of the Labour group on Southwark council: that they do not produce options for the opposition or the public to consider to enable them to judge whether or not there are reserves and whether or not they can get to, or near to, the rate-capping limit. We cannot legislate and make orders simply upon assumptions. Departments and Governments work on facts and those facts ought to be before the House.
It is important to recognise and to proclaim the fact that this order will take away accountability. Under the Rates Act the Government set up a consultation process. The imposition of rate capping is coming before the end of the consultation process, which shows that the consultation process is a sham. Unless the Secretary of State tells the House what the assumptions are, there will be rumours like the one about Haringey repeated earlier today, with certain Members asserting that assumptions of one sort or another have been made while the Secretary of State is saying that that is not the case. The Government have taken the town hall to Whitehall. We are spending much more time debating local government matters because that is what the Government want. Therefore, the Government must make available what they criticise local councils for not making available.
It was a tragedy that when the order was introduced there was no mention of services by the Government. That is what rates are about. The Government seem to ignore arguments about services. That is not to say that the ruling Labour groups in certain councils do not frequently distort them. They do. Liberals believe that it will be impossible, without reducing services, to get down to the proposed limits. If this is the case, I should like to know whether the Minister is prepared to listen to authorities such as mine in Southwark. Southwark should be able to prove to the Secretary of State that it is prepared to make savings, although it cannot reach the Secretary of State's targets.
All the Liberal and alliance groups in rate-capped authorities have said that they want to talk to the Government. We believe that negotiation will be in the interests of our constituents and will provide an opportunity to protect services. Negotiation is better than no talk at all. The Labour party has let down the people in the areas that it represents. If it insists upon spending money upon controversial matters—for instance, upon arts services festivals in London—and does not provide money for home helps and for basic services, it will find that that is not what people are asking for. The people in London, south Yorkshire and Merseyside say that those authorities waste money. If, after cutting out unnecessary expenditure, it can be shown that the money available is insufficient, we can then make a good case to the Government.
The Government have asked us to go down a road that leads ultimately to disaster. Every time the Government impose their will upon local government, local government seeks ways round the law. There will be more abuse. The result of more abuse will be even more Government intervention. The result of more intervention is even more abuse. Local democracy is then demeaned and does not serve the people it is intended to serve. The result is a battle between central Government misusing its position to interfere and Labour authorities often exploiting people simply for political, retaliatory purposes. That is not in the interests of the people of this country. That is not what democracy is about. That is why these orders are bad and unacceptable. We shall vote against them. I hope that the Government will soon be persuaded that to cap rates is to go down a foolish, misguided and, in the end, an economically unjustifiable path, and that they are not serving anybody by going down it.

Mr. Eddie Loyden: Reference has been made by the hon. Member for Southwark and Bermondsey (Mr. Hughes) and by the hon. Member for Liverpool, Mossley Hill (Mr. Alton) to Liverpool. During an inquiry by academics from Liverpool university and elsewhere there was clear evidence that many of the problems facing Liverpool were the result of eight to 10 years of Liberal party control. The hon. Member for Mossley Hill has had the audacity to refer to the confrontation in Liverpool. The hon. Gentleman ought to remember that it was while his party was in office that Liverpool suffered so greatly over housing developments and in many other ways. It was the Labour party in Liverpool that inherited the mess left by the Liberal party, which at the end of the day was acting in concert with the Conservative party.
Figures against the case put forward by the Secretary of State have been mentioned by my hon. Friends the Members for Liverpool, Walton (Mr. Heffer) and for Liverpool, West Derby (Mr. Wareing). I do not intend to repeat what my hon. Friends have said. However, it is very important to look at what I consider to be the kernel of the problem for local authorities and at the reason why we are debating this order.
Like some other hon. Members, I was a city councillor and a member of Merseyside county council. Indeed, I was a member of both of those bodies during the transitional period. I knew a great deal about what was going on then. But in all truthfulness and honesty I must say that I did not welcome with open arms the reorganisation that was brought about by the Tory Government and which created the second-tier authorities. At the time there was a lot of concern about the overlapping and duplication that would occur between the two tiers. Thus. I do not speak as one who was totally committed then to the metropolitan counties.
The local government reorganisation did not do what was needed. It did not assess the changes taking place in terms of community needs and matters involving the environment, housing and so on. Those changes went virtually unheeded by the reorganisation in the early 1970s. However, the metropolitan counties have been innovative. As my hon. Friend the Member for West Derby pointed out, Merseyside county council recognised that the Government's policies were creating mass unemployment, and as it had resources at its disposal, it created organisations that were capable of training people and that created jobs for the unemployed. Since then, the metropolitan counties have been innovative and have not gone on doing the same thing for decade after decade and generation after generation. They have not acted as if they were caught up in impervious rings that they were unable to get out of, but have recognised the need to tackle the changing problems facing them.
Local authorities did very little about minority groups or about the unemployed. Some of the greatest criticism came from the Liberals in Liverpool, when the metropolitan county accepted the need for it to do something about the unemployed on Merseyside. Despite all the Liberals' criticisms and snide remarks about the unemployed centre, that centre now houses many community groups and is cited as a tremendous example of what can be done by local authorities.
It is wrong to argue that local authorities must be rigid in their activities. Many new problems are emerging and local authorities must adjust themselves to them and must consider whether their expenditure meets the needs of the people. Thus, although the reorganisation was far from perfect and did not relate to the changing conditions of the people, I recognise that a new generation of councillors has tackled many problems that were neglected for too long.
The Secretary of State's arbitrary decision means that authorities such as Merseyside will be unable to continue to help to deal with the deprivation that has resulted directly from the Government's policy. Some argue that authorities such as Merseyside are responsible for the confrontation, but it was the Government who threw down the gauntlet to local authorities and who interfered with their democracy. It is the Government who have created confrontation and not the local authorities. The Government constantly interfere directly. A supposedly non-interventionist Government have done more intervening in the rights of local authorities than any Government before them.
In that sense, local authorities will feel the full effect of the decision that is to be taken tonight. Local authority unions and ratepayers recognise more and more the role that the Government are playing in destroying local democracy. They now understand that to defend it they must join those who were elected to represent them to resist the Government's excesses.

Mr. Jack Straw: I, too, declare an interest in that I am a ratepayer of the GLC, ILEA and of the London borough of Lambeth. Thus, the Secretary of State is about to perform a triple on my rates, having forced them up considerably during the past four years by cutting out most of those authorities' RSG.
The order has been brought to the House with undue and unnecessary haste, and with the House being denied crucial information that is in the Secretary of State's possession about the way in which he has exercised his discretion and judgment. The order should be rejected on those grounds alone.
My hon. Friend the Member for Denton and Reddish (Mr. Bennett), in his capacity as Chairman of the Scrutiny Committee, pointed out to Mr. Speaker this afternoon that his Committee was deeply concerned about the short notice that it had been given to scrutinise this measure. Those observations are all the more powerful since they come from a Committee which contains a majority of Conservative Members but which has discharged its responsibilities to the House in a non-partisan way.
In his defence, the Secretary of State has pleaded that the maximum rate for the precepting authorities has to come into force by 15 February. He is gravely misleading the House. By his own Act, he gave himself powers under section 5 to set an interim maximum where, in any circumstances, no final maxima had been prescribed by the relevant date. In commending that clause, as it then was, to the Committee, the Under-Secretary of State, the hon. Member for Bristol, West (Mr. Waldegrave), said:
Clause 5(1) provides that stopgap—an interim maximum which allows an authority to levy a rate while negotiations continue." — [Official Report, Standing Committee G, 28 February 1984; c. 813.]
Yes, it is unfortunate that negotiations about rate limits have only recently commenced, but the fault for that lies

fairly and squarely with the Secretary of State. It was he who forced into the Act conditions attaching to the redetermination procedure so potentially onerous that no authority could conceivably have used that appeal mechanism, as we warned in Committee last year, and as he well knows.
Then there is the crucial question of information that is central to the order but which the Secretary of State has denied to the House. He made a series of assumptions about, among other things, the reserves available to the authorities. He sought repeatedly to reassure the Committee upstairs and the House last year that all his decisions would be subject to the fullest possible scrutiny by Parliament. How can that scrutiny be exercised without the information upon which his decisions are based being made available to the House?
In no way does it lie in the right hon. Gentleman's mouth to complain that the authorities have not provided him with information. Indeed, the Secretary of State said this afternoon that information flowed into the Department thick and fast, and he added that all the authorities had provided a great many figures. It is outrageous and unacceptable that the House, and not just the authorities, should be denied the central information on which the Government are making orders such as this.
The Secretary of State has sought to justify draconian controls over local government by reference to the Government's economic policy. There is no justification for that, as I spelt out in the rate support grant debate on 16 January. Let us be clear that, stripped bare, these provisions are nothing more than a crude attempt to stitch up Labour authorities which are seeking to defend jobs and services against the ravages of unemployment caused by the Government. The order is an abuse of power.
The Secretary of State claims that the authorities were fairly selected by reference to what he has, in the past, described as the "robust" and "objective" tests of GREA, as he told the Standing Committee on 21 February 1983—[Interruption.] I am glad to see the Minister of State blowing in incredulity at the thought that his right hon. Friend would have used such words. If the Secretary of State believes that these measures are robust and objective, he should talk to the Minister of State, for only three weeks ago that Minister made it crystal clear that he thinks no such thing either about GREA or target. Indeed, he described the system as well nigh incomprehensible, as exceptionally difficult to explain and as byzantine in its complexity. Any system that is incomprehensible and byzantine cannot possibly be robust and objective, for to be that it would have to be fair and be seen to be fair.
In the rate support grant debate, many Conservative Members complained bitterly about the nonsense of GREA. The crucial defect in the Secretary of State's case is that GREA is being used for a purpose for which it was never intended, as my hon. Friend the Member for Copeland (Dr. Cunningham) spelt out.
If GREA were an objective test, one must ask why the City of London has not been rate-capped when its expenditure is three times above GREA compared with any other authority, at 263 per cent. The Minister will answer that, although the City of London's expenditure is 263 per cent. above its GREA, the city does not meet the other test for rate capping, that of target. But target is supposed to relate to an authority's cash growth in expenditure, and the City of London's cash growth in


expenditure has also, since 1978–79, been the highest of any authority in the land, at 274 per cent., way above that of the much abused GLC.
Nothing illustrates better the thoroughly arbitrary and disreputable way in which the Secretary of State has fixed and fitted up these tests than to compare the treatment of the GLC with that of the City of London. The City's target has been fiddled so that it escapes rate capping. The GLC's target has been fiddled so that it is heavily penalised and is now rate-capped.
If the Secretary of State does not accept that, perhaps he will explain how, as one of the many costs that he has had to pay to make rate capping work, he has this year, at a stroke, increased the GLC's target by 64 per cent. over last year.
The four rate-capped authorities we discuss today have increased their expenditure by more than the average for all authorities. It is inherent in any system of local democracy that some authorities will spend more than the average and that some will spend less. No freedom is exercisable without diversity. But of the four authorities, only one, the GLC, has increased its expenditure since 1981–82 by more than central Government have increased their expenditure on, for example, defence.
For the GLC, Merseyside and South Yorkshire, a large part of their expenditure increase has been on public transport. That expenditure has proved overwhelmingly popular, as the Government know now that they have taken control of LRT, and, despite the lunancies, illegalities and irrationalities of the Secretary of State for Transport, have had broadly to maintain the Fares Fair policy. This expenditure has also been efficient in economic terms. The Department of Transport's study showed that, for every £1 in subsidy, the local economies benefited by £1·20.
Part of the increase in expenditure by South Yorkshire and Merseyside has been on the police, at the behest of the Home Office. If these provisions go through, Merseyside may have to cut its expenditure on its police force by over £5 million, to a level that could not be achieved
without severe emasculation of the police service",
as the chief constable of Merseyside, Mr. Kenneth Oxford, said a few weeks ago. The Merseyside fire service would have to be cut by £2·5 million, despite the fact that Merseyside is one of the most risky fire areas. The ability of the fire service to meet its statutory obligations would be critically impaired.
The other significant part of the increase in expenditure by these three authorities is seen in the employment policies. We applaud those policies. All three of the authorities are working in areas of massive economic deprivation and high levels of unemployment. They have been able, not least through constructive partnership with the private sector, to create and secure jobs and to reduce the terrifying levels of unemployment. If these programmes are cut, jobs will go and unemployment will rise. Is that what the Secretary of State wants? I believe that the answer is certainly yes.
I declare a further interest because I am a parent of a child at an ILEA school. From 1971 to 1974 I was the Islington borough representative on that authority. ILEA has higher unit costs than other authorities, but that is the product of providing a higher level of service and providing many services for people who work in London,

but whose homes are in the lower rated shire areas, and is the product of the additional costs, which cannot be avoided, of running a service in a capital city.
The Government recognise those factors when they consider financing the Metropolitan police. Even though there are more police officers in London than in comparable areas outside London—we recognise that—the Government must explain why it costs 40 per cent. more to employ a police officer in London and £800 more for the Metropolitan police to buy a police vehicle than it costs outside London. Why does it cost £5,500 to clear up each crime within London, but only £1,500 to clear up each crime in metropolitan areas outside London?
The Government understand these additional costs in relation to the Metropolitan police, but they are blind to the extra costs of the capital city in relation to ILEA. ILEA has a fine record. It is one of only six authorities regarded by HMI as having a proper standard. If ILEA were required to spend as these rate limits suggest, a great many jobs in the service would be at risk and the quality of the education provided for all our children could well suffer.
The Secretary of State made the preposterous claim that he was doing all this to bring down rate levels and to improve expenditure in the non-rate-capped areas. When will the Secretary of State understand that the system he has created is so barmy that, if rate capping works to bring down expenditure in the rate-capped areas, rates will have to increase in the non-rate-capped areas? How many more times do we have to tell the Secretary of State about this? He has spelt this out in parliamentary answers. Does he not read those answers? Does he not understand that if all the authorities did what he told them and all spent at GREA, rates in Berkshire would have to go up by 20 per cent. and rates in Essex would have to go up by 25 per cent?

Mr. Patrick Jenkin: That is silly.

Mr. Straw: Will the right hon. Gentleman tell me why it is silly? The Secretary of State says that he knows that no authority will do this. I assume that means that GREA is a nonsense of an exercise. Is that the point? Of course that is true.

Mr. Jenkin: It is stupid.

Mr. Straw: The right hon. Gentleman says that it is stupid. He gave me the answer. It may be true that his policy will not work overnight and do what he wants it to do so that all authorities can spend at GREA. The right hon. Gentleman told the House that the idea was that the policy should work towards all authorities spending at GREA. In that case, at the very least, rates in Essex would not be forced up by 30 per cent. They would be forced up by 15 per cent. The Secretary of State must understand the simple arithmetic of this system — "overspending" by Labour authorities has protected jobs and services and the ratepayers not only in those Labour areas but in the lower-rated Tory areas. Such is the madness and utter lunacy of the system created by the right hon. Gentleman.
I have two concluding points. The first is about the crucial connection between rates and jobs. When will the Secretary of State and the Minister of State have completed their evaluation of the Cambridge report? It is a final report, and they no doubt knew about its contents before it was submitted to them. [Interruption.] Do they want a copy?

The Minister for Local Government (Mr. Kenneth Baker): Put it in the Library.

Mr. Straw: I am not allowed to put things in the Library. We have had that problem before. Only Ministers can deposit documents in the Library.
When will the Secretary of State publish the report, which concludes:
the analyses provide no evidence that either the level of rates or the increase in rates affects the distribution of employment between local authority areas."?
It continues:
If the failure to detect a widespread and general impact of rates on the location of jobs reflects the absence of such a link, there are important implications for public policy. In particular, the findings suggest that local authorities that have above average levels of rates, or that levy above average rate increases, are probably not damaging their local economies.
It suggests that it is highly probable that additional expenditure out of rates in the higher rated areas is increasing employment.
If the order is carried, it will do nothing for the Government's economic policy; it will severely damage the lives of people in some of our worst-off areas; and it will force up unemployment and replace the democratic will of those communities by centralised dictation. It must be rejected by the House.

The Minister for Local Government (Mr. Kenneth Baker): The House will be pleased to know that the debate does not have to go on until 10 o'clock. The arrangement is that I speak for about 10 or 15 minutes.
This is the first occasion that the House has had a chance to debate the first order under the Rates Act 1984. I found myself agreeing with the phrase used by my hon. Friend the Member for Wirral, South (Mr. Porter) when he said that he looked upon the order as a disagreeable necessity. No Government go readily into the business of rate capping.
The hon. Member for Woolwich (Mr. Cartwright) talked about the strained relationship that exists between central and local government and how it has changed over the past four or five years. It has not changed solely because we have been in office. Underlying forces have been at work for a long time. One fundamental change is that we have succeeded in putting the handbrake on local authority expenditure. In the 1960s and 1970s it was growing at about 3 per cent. a year. Since 1979, it has grown at about 1 per cent. per year. I would be the first to recognise that that imposes a great strain upon the relationship between local and central government.

Dr. Cunningham: Even if that were a valid argument in respect of that part of local government expenditure provided by the Exchequer—one can see and concede the arguments for a cash limit on that expenditure at some point — what is the relevance of all that to local government expenditure from its own resources?

Mr. Baker: It arises because successive Governments, not just ours, have been worried by the totality of local government expenditure and the sources from which local government can finance it.
We are bringing in this order today, and we shall be bringing in an order for the lower-tier authorities in about a fortnight, because the overspending of the 18 rate-capped authorities together represents £632 million against target. That is a massive sum of money. Since 1979, those 18 authorities have increased their expenditure from £1·3 billion to £3·1 billion. That is a massive, threefold increase, and infinitely higher than the rate of inflation.
The four authorities covered by the order are overspending against targets some £523 million when we are asking local authorities to exercise restraint, and most of them are doing so. Some 85 per cent. of the local authorities are spending at target or close to it.
I should like to refer to the meeting that took place earlier this week, when a group of rate-capped authorities came to see the Secretary of State and myself. There were not just rate-capped authorities — 26 authorities were there in all, led by Councillor Blunkett. It was a self-appointed caucus. There was nobody in the delegation from those significant authorities controlled by Labour — Birmingham, Newcastle, Coventry or Gateshead—and there were no representatives from the shire counties. One had to ask oneself whom those people represented. They represented just themselves.
The rate-capped authorities were there, plus another nine. If we negotiated with them as a group, we would betray the other 387 authorities that are working broadly or precisely within the system—[Horn. MEMBERS: "Why did the Government have the meeting?"] Because we are reasonable people. Those representatives asked to see us and we said that we would meet them. If we had not met them, the Opposition Front Bench would say, "Why are you so pigheaded, obdurate and obstinate in not seeing them?" Of course my right hon. Friend the Secretary of State or I are willing to see them, but they cannot be expected to enter into negotiations with the Government as representing the broad mass of local authorities.
We made it clear to Councillor Blunkett, the leader of Sheffield, that we would not be blackmailed into providing more finance. That was the point that my hon. Friend the Member for Sheffield, Hallam (Sir J. Osborn) asked me to reconfirm. That meeting on Monday this week was not the first round of a 15-round contest. Uppermost in our minds have been the interests of the domestic and commercial ratepayers who have suffered considerably through a blizzard of increased rate demands over a period of years.

Mr. Heffer: The Minister will agree that the various authorities put forward a series of very important proposals, to which the Secretary of State referred. Why were they just pushed aside without any serious consideration?

Mr. Baker: I shall tell the hon. Gentleman why. Councillor Blunkett was asking us whether we would suspend the operation of the rate support grant system, which is separate from the order that we are discussing. He asked us to suspend the Rates Act and to recalculate the entire rate support grant system. He asked for a cooling-off period.
The 18 rate-capped authorities had from 24 July' last year — the date on which my right hon. Friend announced the expenditure levels for those 18 authorities — roughly until Christmas to discuss with the Government, if they wanted to, whether those expenditure levels were adequate. They chose not to do so. All right. That was their choice, but by not coming to discuss the matter with my right hon. Friend, they denied themselves the opportunity of discussing whether the expenditure level for their areas was appropriate for next year. When the rate limits were announced—

Mr. Barnett: Will the right hon. Gentleman give way?

Mr. Baker: I should like to proceed.
On 11 December my right hon. Friend announced the rate limits. Again, the authorities had an opportunity to come and see us. When the statement was made, we made it clear that they had until 15 January. We extended the date until the end of January. We have followed an open-door policy. We have said that we would be prepared to meet them, and that the meetings would be only on an individual basis. However, when the authorities asked whether we would see a collective delegation, we said yes. In view of what I have said and in view of the time that the authorities have had since 24 July to discuss the matter with the Government, all that I can say is that they have been warming up for that cooling-off period for 30 weeks.

Mr. Simon Hughes: I hope that the Minister will come to the conclusion that the whole point of the meeting was to cover up the divisions in the Labour party between those who believe that they can make some savings and those who believe that they should not do so. Whatever the merits of the authorities meeting the Secretary of State, that was the reason for the meeting, and those people are to blame for its failure.

Mr. Baker: I could not have put it better. Sometimes the alliance is right, as it is on this occasion. The purpose of the exercise was political brinkmanship and to cover up the clear divisions between the individual authorities. Some wanted to settle and some were prepared to move into illegality.

Mr. Michie: I do not want the House to be misled by the claim that no local authorities have communicated. I do not have the information in front of me, but I remember that the chief executive of Sheffield wrote to the Secretary of State about the anomalies of the block grant as opposed to the urban programme and its problems. The Audit Commission also brought to the Government's attention the anomalies in GREA, and so forth. The problems have been presented to the Government and the Minister is well aware of them without being reminded of them every five minutes.

Mr. Baker: The hon. Gentleman is a county councillor in south Yorkshire. We have had one letter from south Yorkshire, virtually declining to give us any information. I believe that we have had a little more information from Sheffield, but I shall have to check. We have told the authorities to provide us with the information which, under the Act, the onus is upon them to provide. Indeed, some of the authorities did. When we met the delegation on Monday we had on the desk in front of us the piles of information that we had received from ILEA and the GLC.

Mr. Barnett: I am grateful to the Minister for giving way. He says that the authorities have had since last July, and in theory he is correct. But does he not understand that it would be inappropriate for the authorities to make an approach to him until they have made their budgets or their estimates as to their expenditure for 1985–86? Is he not also aware — surely he is — that they now have a statutory responsibility to consult in their areas before setting that budget? Therefore, it is important that they know what they are talking about before they make any approach to the Secretary of State.

Mr. Baker: The timing of consultation is specifically provided for in the Rates Act, although I cannot remember

in which section. There was no reason why the authorities should not come to talk about expenditure levels way back in the summer and autumn if they had wanted to. They chose not to for political reasons.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) asked me what the effect of rate capping would be upon local communities and their services. I can only say that if authorities had started last year, after the announcement of the expenditure levels, to live within those levels, they would not now be facing some of the problems that they are having to face. He said that he was worried that the authorities had not come in. That means that the decisions that will have to be taken now will be more serious and grave than they would otherwise have been.
Again, it is depressing that, far from trying to live within the expenditure levels that we have set, the 18 rate-capped authorities have subsequently published their own budgets showing an increase of some £424 million over and above the expenditure levels. That is a cumulative act of considerable irresponsibility. Those authorities are building up expectations that no Government could possibly meet. For example, the GLC has just published a budget that increases its revenue expenditure next year by £100 million and its capital expenditure by some £300 million. For an authority that has only 12 months to survive and operate—

Mr. Tony Banks: rose—

Mr. Baker: —that is to dance on the deck of the Titanic.

Mr. Tony Banks: Will the right hon. Gentleman give way?

Mr. Baker: No, I have given way several times.
Several hon. Members, especially hon. Members from the Merseyside area, have said that services will be slashed. The authorities should have addressed the problem a year ago. We are asking authorities only to cut expenditure according to the cost of inflation, by about 4·5 or 5 per cent. The authorities budget up and then say that they have to cut from the higher budget. There are many examples of authorities that have cut their expenditure effectively.

Mr. Wareing: Will the right hon. Gentleman give way?

Mr. Baker: Many authorities have been able to make such cuts. My hon. Friend the Member for Langbaurgh (Mr. Holt) mentioned Brent. That authority, which is under mixed control, though led by the Conservatives at the moment, has cut £20 million without cutting a single member of staff.

Mr. Laurie Pavitt: Will the right hon. Gentleman give way?

Mr. Baker: With great respect, I have given way many times, and the hon. Gentleman has not spoken in the debate.
I should like to remind the House of the extent to which we are protecting the ratepayers in these proposals. Under the precept limit in the order, the precept for the GLC is 36·5p. The precept in the GLC budget will be 43p—an increase of 18 per cent. The ILEA's precept in the order is 77·25p. The budget that ILEA has issued implies 83p—7 per cent. more.
In Merseyside, the figures are much better—I mean much higher—[Interruption.] The figures are better in the sense that they are even more irrational and show that the council is living in a dream world. The precept in the order is 82·86p. If the ratepayers of Merseyside were not protected by the order, they would have to pay 130·5p—57 per cent. more. The ratepayers of south Yorkshire would have to pay some 43 per cent. more.
The precepting authorities have spent extravagantly. The GLC has probably been the most extravagant. In the past 12 months, the GLC has taken on some 1,490 extra members of staff. It has indulged in a huge advertising campaign costing some £10 million.
The hon. Member for Woolwich fears that authorities that will not levy the precept approved by Parliament will be gambling with people's livelihoods and, in some cases, lives. I agree with him. I hope that the Labour councillors in the authorities under discussion will, during the next month, agree a legal precept. That was the advice that they were given by the hon. Member for Copeland (Dr. Cunningham). I congratulate the hon. Gentleman on his courage in giving that advice. It was the advice given by the leader of the Labour party at the Labour local government conference last weekend. That was the right advice. The right hon. Gentleman and the hon. Gentleman want no hand in condoning the illegality that some of the wilder leaders of the extreme Left in Labour councils advocate. I hope that their wise advice will be followed. Having seen the Labour party dragged down by Mr. Scargill, they want to ensure that it is not clubbed to death by Councillor Hatton, Councillor Livingstone and Councillor Knight. I hope that, now that Parliament is about to approve the precepts, the various councils will act and pass them into law during the next few weeks.

Question put:—

The House divided: Ayes 255, Noes 193.

Division No. 94]
[9.28 pm


AYES


Adley, Robert
Brooke, Hon Peter


Aitken, Jonathan
Brown, M. (Brigg amp; Cl'thpes)


Alexander, Richard
Bruinvels, Peter


Alison, Rt Hon Michael
Bryan, Sir Paul


Amess, David
Buck, Sir Antony


Ancram, Michael
Budgen, Nick


Arnold, Tom
Bulmer, Esmond


Ashby, David
Burt, Alistair


Aspinwall, Jack
Butcher, John


Atkins, Rt Hon Sir H.
Carlisle, John (N Luton)


Atkins, Robert (South Ribble)
Carlisle, Kenneth (Lincoln)


Atkinson, David (B'm'th E)
Cash, William


Baker, Rt Hon K. (Mole Vall'y)
Channon, Rt Hon Paul


Baker, Nicholas (N Dorset)
Chapman, Sydney


Baldry, Tony
Chope, Christopher


Banks, Robert (Harrogate)
Churchill, W. S.


Batiste, Spencer
Clark, Hon A. (Plym'th S'n)


Bellingham, Henry
Clark, Dr Michael (Rochford)


Bendall, Vivian
Clarke, Rt Hon K. (Rushcliffe)


Bevan, David Gilroy
Cockeram, Eric


Biffen, Rt Hon John
Colvin, Michael


Biggs-Davison, Sir John
Coombs, Simon


Blackburn, John
Cope, John


Blaker, Rt Hon Sir Peter
Corrie, John


Body, Richard
Couchman, James


Boscawen, Hon Robert
Critchley, Julian


Bottomley, Peter
Crouch, David


Bottomley, Mrs Virginia
Currie, Mrs Edwina


Bowden, A. (Brighton K'to'n)
Dicks, Terry


Braine, Rt Hon Sir Bernard
Dorrell, Stephen


Brandon-Bravo, Martin
Douglas-Hamilton, Lord J.


Bright, Graham
Dover, Den


Brinton, Tim
Dunn, Robert





Edwards, Rt Hon N. (P'broke)
Lawrence, Ivan


Eggar, Tim
Leigh, Edward (Gainsbor'gh)


Emery, Sir Peter

Lester, Jim


Evennett, David
Lloyd, Ian (Havant)


Eyre, Sir Reginald
Lloyd, Peter, (Fareham)


Fallon, Michael
Luce, Richard


Finsberg, Sir Geoffrey
Lyell, Nicholas


Fookes, Miss Janet
McCurley, Mrs Anna


Forman, Nigel
MacKay, Andrew (Berkshire)


Forsyth, Michael (Stirling)
Major, John


Forth, Eric
Marshall, Michael (Arundel)


Fowler, Rt Hon Norman
Mather, Carol



Franks, Cecil
Miller, Hal (B'grove)


Fraser, Peter (Angus East)
Mills, Sir Peter (West Devon)


Freeman, Roger
Monro, Sir Hector


Fry, Peter
Moynihan, Hon C.


Galley, Roy
Nelson, Anthony


Gardiner, George (Reigate)
Neubert, Michael


Gardner, Sir Edward (Fylde)
Newton, Tony


Garel-Jones, Tristan
Nicholls, Patrick


Glyn, Dr Alan
Normanton, Tom


Goodhart, Sir Philip
Onslow, Cranley


Goodlad, Alastair
Osborn, Sir John


Gow, Ian

Pattie, Geoffrey


Gower, Sir Raymond
Pawsey, James


Grant, Sir Anthony
Percival, Rt Hon Sir Ian


Greenway, Harry
Pollock, Alexander


Griffiths, Peter (Portsm'th N)
Porter, Barry


Grist, Ian
Powley, John


Ground, Patrick
Proctor, K. Harvey


Hamilton, Hon A. (Epsom)
Raison, Rt Hon Timothy


Hamilton, Neil (Tatton)
Rathbone, Tim


Hampson, Dr Keith
Rhodes James, Robert


Hanley, Jeremy
Roberts, Wyn (Conwy)


Hannam, John
Robinson, Mark (N'port W)


Hargreaves, Kenneth
Roe, Mrs Marion


Harris, David
Rossi, Sir Hugh


Harvey, Robert
Rost, Peter


Haselhurst, Alan
Rowe, Andrew


Hawkins, C. (High Peak)
Rumbold, Mrs Angela


Hawkins, Sir Paul (SW N'folk)
Ryder, Richard



Hawksley, Warren
Sackville, Hon Thomas


Hayhoe, Barney
Sainsbury, Hon Timothy


Hayward, Robert
Sayeed, Jonathan


Heathcoat-Amory, David
Scott, Nicholas


Henderson, Barry
Shaw, Giles (Pudsey)


Heseltine, Rt Hon Michael
Shaw, Sir Michael (Scarb')


Hickmet, Richard
Shelton, William (Streatham)


Hill, James
Shepherd, Colin (Hereford)


Hind, Kenneth
Shepherd, Richard (Aldridge)


Hogg, Hon Douglas (Gr'th'm)
Shersby, Michael


Holland, Sir Philip (Gedling)
Silvester, Fred


Holt, Richard
Sims, Roger


Hordern, Peter
Skeet, T. H. H.


Howard, Michael
Smith, Sir Dudley (Warwick)


Howarth, Alan (Stratf'd-on-A)
Smith, Tim (Beaconsfield)


Howarth, Gerald (Cannock)
Speed, Keith


Howe, Rt Hon Sir Geoffrey
Speller, Tony


Howell, Rt Hon D. (G'ldford)
Spence, John


Howell, Ralph (N Norfolk)
Spencer, Derek


Hubbard-Miles, Peter
Spicer, Jim (W Dorset)


Hunt, John (Ravensbourne)
Squire, Robin


Hunter, Andrew
Stanbrook, Ivor


Irving, Charles
Stanley, John


Jackson, Robert
Steen, Anthony


Jenkin, Rt Hon Patrick
Stern, Michael


Jessel, Toby
Stevens, Lewis (Nuneaton)


Johnson Smith, Sir Geoffrey
Stevens, Martin (Fulham)


Jones, Robert (W Herts)
Stewart, Allan (Eastwood)


Joseph, Rt Hon Sir Keith
Stewart, Andrew (Sherwood)


Kershaw, Sir Anthony
Stewart, Ian (N Hertf'dshire)


Key, Robert
Stokes, John


King, Roger (B'ham N'field)
Sumberg, David



King, Rt Hon Tom
Tapsell, Sir Peter


Knight, Gregory (Derby N)
Taylor, John (Solihull)


Knight, Mrs Jill (Edgbaston)
Terlezki, Stefan


Knowles, Michael
Thomas, Rt Hon Peter


Lamont, Norman
Thompson, Donald (Calder V)


Lang, Ian
Thompson, Patrick (N'ich N)


Latham, Michael
Thorne, Neil (Ilford S)






Thornton, Malcolm
Watson, John


Thurnham, Peter
Watts, John


Townend, John (Bridlington)
Wells, Bowen (Hertford)


Townsend, Cyril D. (B'heath)
Wells, Sir John (Maidstone)


Tracey, Richard
Wheeler, John


Trippier, David
Whitney, Raymond


Trotter, Neville
Wilkinson, John


Twinn, Dr Ian
Wolfson, Mark


van Straubenzee, Sir W.
Wood, Timothy


Vaughan, Sir Gerard
Yeo, Tim


Viggers, Peter
Young, Sir George (Acton)


Waddington, David
Younger, Rt Hon George


Walden, George



Walker, Bill (T'side N)
Tellers for the Ayes:


Waller, Gary
Mr. Mark Lennox-Boyd and


Ward, John
Mr. Tony Durant.


Wardle, C. (Bexhill)




NOES


Abse, Leo
Cox, Thomas (Tooting)


Adams, Allen (Paisley N)
Craigen, J. M.


Alton, David
Crowther, Stan


Anderson, Donald
Cunningham, Dr John


Archer, Rt Hon Peter
Davies, Rt Hon Denzil (L'lli)


Ashdown, Paddy
Davies, Ronald (Caerphilly)


Ashley, Rt Hon Jack
Davis, Terry (B'ham, H'ge H'I)


Ashton, Joe
Deakins, Eric


Atkinson, N. (Tottenham)
Dewar, Donald


Bagier, Gordon A. T.
Dixon, Donald


Banks, Tony (Newham NW)
Dobson, Frank


Barnett, Guy
Dormand, Jack


Barron, Kevin
Douglas, Dick


Beith, A. J.
Dubs, Alfred


Bell, Stuart
Duffy, A. E. P.


Benn, Tony
Dunwoody, Hon Mrs G.


Bennett, A. (Dent'n amp; Red'sh)
Eastham, Ken


Bermingham, Gerald
Edwards, Bob (W'h'mpt'n SE)


Bidwell, Sydney
Evans, John (St. Helens N)


Blair, Anthony
Ewing, Harry


Boothroyd, Miss Betty
Fatchett, Derek


Boyes, Roland
Field, Frank (Birkenhead)


Bray, Dr Jeremy
Fields, T. (L'pool Broad Gn)


Brown, Gordon (D'f'mline E)
Fisher, Mark


Brown, Hugh D, (Provan)
Flannery, Martin


Brown, N. (N'c'tle-u-Tyne E)
Foot, Rt Hon Michael


Brown, R. (N'c'tle-u-Tyne N)
Forrester, John


Caborn, Richard
Foster, Derek


Callaghan, Jim (Heyw'd amp; M)
Foulkes, George


Campbell, Ian
Fraser, J. (Norwood)


Campbell-Savours, Dale
Freeson, Rt Hon Reginald


Canavan, Dennis
Freud, Clement


Carlile, Alexander (Montg'y)
Garrett, W. E.


Cartwright, John
George, Bruce


Clark, Dr David (S Shields)
Gilbert, Rt Hon Dr John


Clarke, Thomas
Godman, Dr Norman


Clay, Robert
Golding, John


Clwyd, Mrs Ann
Gould, Bryan


Cohen, Harry
Gourlay, Harry


Coleman, Donald
Hamilton, James (M'well N)


Concannon, Rt Hon J. D.
Hamilton, W. W. (Central Fife)


Cook, Frank (Stockton North)
Hardy, Peter


Corbyn, Jeremy
Harman, Ms Harriet


Cowans, Harry
Harrison, Rt Hon Walter





Hart, Rt Hon Dame Judith
Park, George


Hattersley, Rt Hon Roy
Parry, Robert


Haynes, Frank
Patchett, Terry


Healey, Rt Hon Denis
Pavitt, Laurie


Heffer, Eric S.
Pendry, Tom


Hogg, N. (C'nauld amp; Kilsyth)
Penhaligon, David


Howell, Rt Hon D. (S'heath)
Pike, Peter


Howells, Geraint
Powell, Rt Hon J. E. (S Down)


Hughes, Robert (Aberdeen N)
Prescott, John


Hughes, Roy (Newport East)
Radice, Giles


Hughes, Simon (Southward)
Rees, Rt Hon M. (Leeds S)


Janner, Hon Greville
Richardson, Ms Jo



John, Brynmor
Roberts, Allan (Bootle)


Johnston, Russell
Roberts, Ernest (Hackney N)


Jones, Barry (Alyn amp; Deeside)
Robertson, George


Kaufman, Rt Hon Gerald
Rogers, Allan


Kennedy, Charles
Rooker, J. W.


Kilroy-Silk, Robert
Ross, Stephen (Isle of Wight)


Lambie, David
Rowlands, Ted


Lamond, James
Sedgemore, Brian


Leadbitter, Ted
Sheerman, Barry


Leighton, Ronald
Shore, Rt Hon Peter


Lewis, Ron (Carlisle)
Short, Ms Clare (Ladywood)


Lewis, Terence (Worsley)
Short, Mrs R.(W'hampt'n NE)


Lloyd, Tony (Stretford)
Silkin, Rt Hon J.



Lofthouse, Geoffrey
Skinner, Dennis


Loyden, Edward
Smith, C.(lsl'ton S amp; F'bury)


McCartney, Hugh
Smyth, Rev W. M. (Belfast S)


McCusker, Harold
Snape, Peter


McDonald, Dr Oonagh
Soley, Clive


McGuire, Michael
Spearing, Nigel


McKay, Allen (Penistone)
Steel, Rt Hon David


McKelvey, William
Stott, Roger


Mackenzie, Rt Hon Gregor
Strang, Gavin


Maclennan, Robert
Straw, Jack


McNamara, Kevin
Taylor, Rt Hon John David


McTaggart, Robert
Thomas, Dafydd (Merioneth)


Madden, Max
Thompson, J. (Wansbeck)


Marek, Dr John
Thorne, Stan (Preston)


Marshall, David (Shettleston)
Tinn, James


Maxton, John
Wainwright, R.


Maynard, Miss Joan
Wardell, Gareth (Gower)


Meacher, Michael
Wareing, Robert


Meadowcroft, Michael
Weetch, Ken


Michie, William
White, James


Mikardo, Ian
Williams, Rt Hon A.


Millan, Rt Hon Bruce
Winnick, David



Miller, Dr M. S. (E Kilbride)
Woodall, Alec


Morris, Rt Hon A. (W'shawe)
Wrigglesworth, Ian


Morris, Rt Hon J. (Aberavon)
Young, David (Bolton SE)


Nellist, David



Oakes, Rt Hon Gordon
Tellers for the Noes:


O'Brien, William
Mr. Sean Hughes and


O'Neill, Martin
Mr. Lawrence Cunliffe.


Orme, Rt Hon Stanley

Question accordingly agreed to.
Resolved,
That the draft Rate Limitation (Prescribed Maximum) (Precepts) Order 1985, which was laid before this House on 30th January, be approved.

Orders of the Day — Hong Kong Bill

Considered in Committee

[SIR PAUL DEAN in the Chair]

Clause 1

ENDING OF BRITISH SOVEREIGNTY AND JURISDICTION OVER HONG KONG

Question proposed, That the clause stand part of the Bill.

Mr. George Robertson: This is the crucial clause as it gives effect to the transfer of sovereignty from 1 July 1997. It is therefore appropriate at this stage to ask the Government a number of questions which have been outstanding since Second Reading.
We had a very long, full and illuminating debate on Second Reading, and I see from the press that many people in Hong Kong have read our proceedings and, through the press and other channels, have offered many views on the subjects with which we dealt on that occasion. Nevertheless, a number of loose ends remain that are not covered in the amendments.
Contrary to some of the views expressed in the colony, this is not a minority subject in the British House of Commons. Throughout the many debates in the past 18 months, the interest in Hong Kong, its people and its future has been outstanding. During that period, 73 Members contributed on at least one occasion in debates and questions on the subject. That is a fair record by any standard. A number of Members have spoken on several occasions while others have sat patiently throughout the debates but failed to catch the eye of the Chair. This has reflected the genuine and continuing interest and concern of the House for the people on the other side of the world whose future we are now debating.
At the outset, I express our gratitude to the Government for the time that has been allowed between the Second Reading and Committee stages. The decision to postpone Second Reading for 10 days was taken in response to a request from the Opposition. It has provided a valuable opportunity for hon. Members and people in Hong Kong to study the issues and come forward with considered views on them. I see from the local press in Hong Kong that the gratitude that we are expressing tonight is reflected in Hong Kong.
I examined the information provided to us about press comment, and must express gratitude to those who provided us with that information, including Mr. Colvin Haye, his assistants and the Hong Kong Government Office. They have provided full background information which allows us to see the views, not all of which are uncritical, of the Hong Kong Government, and to reach better decisions about the views that we have adopted.
9.45 pm
I can also fairly reflect the gratitude of individual Hong Kong people. I single out Mr. and Mrs. Y. W. Fong, who

wrote to me on the back of a commemorative postcard—a first day cover of the official signing of the joint declaration. The hon. Member for Christchurch (Mr. Adley) has had his attendances at the debate marked in the same way. Many other people have written interesting comments, which will be useful when we debate the technical clauses.
wish to ask the Government many questions about the transfer of sovereignty. This may be the last chance to ask questions and hear the Government's view for some time. I shall deal with the question of an annual report to Parliament. During the period to 1997, when sovereignty is handed over, detailed discussions will have to take place about the handover. Some of them will take place in the joint liaison group, but many will take place in the Legislative and Executive Council in Hong Kong. There is no adequate way for hon. Members to gain information about what is going on unless it is provided in an ordered form. The best way to provide information would be for the Government to provide Parliament with an annual report of progress.
During the last debate, many hon. Members were disappointed in the attitude of Ministers towards the idea of an annual report and of regular or semi-regular views on the issue. I hope that since then the Minister has had a chance to reflect, and that the Government will realise that we are not making a partisan point, but that it is a genuine desire of all parliamentarians to know precisely what is going on during that important period.
I have consistently said to representatives from Hong Kong, individuals who have written and the media that we believe that party politics should not play a major part in this issue. Obviously the purpose of the Opposition is to question the Government and to ensure that they are on their toes. However, there will be at least three British Governments before Hong Kong finally becomes part of the People's Republic of China, and we are almost certain that they will include Labour Administrations. It is therefore extremely important that all potential Governments are well briefed on what is going on behind the scenes and know how much progress is being made. We must know what progress will be made on the drafting of the basic law, which, although it is a matter for the Government of the People's Republic of China, is crucial to the people of Hong Kong. There will also be questions about the progress towards the new nationality that we shall be debating later this evening.
All those matters will be relevant to the transfer of sovereignty, and hon. Members have a right to know about them. The only alternative to the Government providing the information in an ordered form is to rely on the British and Hong Kong press. They will be the only ones to tell us what is happening and whether the progress is popular in the colony. I hope that the Minister can tell us whether we shall have such systematic feedback in the months ahead.
Secondly, if there is to be an annual report, or even in the absence of one, will Parliament have regular opportunities to debate progress towards the transfer of sovereignty? I hope that the Minister has changed his mind since Second Reading, and that he will say that, for example, a Select Committee will investigate the many issues that arise in the intervening period.
The third point on which I seek illumination is the drafting of the basic law. That will be part of the joint agreement with the People's Republic. Yet, as we know,


the people of Hong Kong have an overwhelming interest in that law, and we are still not clear whether the consultation that the Chinese have promised with the people of Hong Kong will be formal or informal. Will committees be set up that represent directly the people of Hong Kong, or will there be less tangible consultation?
The only agency that can provide such information to the House is the Government. It would be helpful to know this evening whether the Government are in a better position now than they were two weeks ago to tell us whether the consultation will include local people or whether it will mirror the rather vague, albeit important, statements that have been made by the Chinese about the necessity for consulting people in Hong Kong.
Fourthly, in the period until sovereignty is handed over, the future prosperity and stability of Hong Kong will depend upon international acceptance of Hong Kong's unique status. We are still not clear about what will happen with the GATT and MFA agreements. The House will wish to know what progress the Government have made and how they intend to ensure that the enterprise on which Hong Kong's prosperity is based will continue. From press comment in Hong Kong during the past few months, this would appear to be a matter of acute and personal interest there.
We must also ask questions about the progress towards more domestic institutions in Hong Kong. The Hong Kong Government have expressed their views, and decisions will soon have to be taken. A review has been fixed for 1987, and major decisions about the pace of change will have to be taken then. But a commentary from the Government, who still have overall responsibility for the structure of institutions in Hong Kong, would help hon. Members who are deeply interested in the introduction of more representative institutions there.
The methods by which the House of Commons debates such a Bill are foreign to many people, not just in Hong Kong but elsewhere outside the House, and some of our procedures seem archaic and bizarre and are easily open to misunderstanding. I hope that people outside the House, especially those who listen so acutely in Hong Kong to every word that we say, will recognise that the scrutiny that we are giving to this Bill reflects a proper concern for the anxieties of the people of Hong Kong for their future, and our continuing concern.

Mr. Robert Adley: I agree with almost everything that the hon. Member for Hamilton (Mr. Robertson) has said. We have done all we can to serve the people of Hong Kong to the best of our ability. I hope that it is not presumptuous to say to the hon. Gentleman that the fact that the House has been almost unanimous on this issue may not excite comment from those who look to this building only when it is in a state of apparent conflict. However, in terms of doing a serious job to the best of our ability, the way that we have tried to handle this issue is the best way to handle it on behalf of the people of Hong Kong, whose future we are trying to protect as best we can, within the somewhat limited means at our disposal.
I do not wish to break the spirit of bipartisanship, but the hon. Member for Hamilton referred to the possibility of there being another Labour Government before 1997, which is a matter best left to the hon. Member for Bow and Poplar (Mr. Mikardo) to work out. I mention this because

it illustrates the impossibility of any Parliament, even if it is not democratic, giving guarantees about the future, because politics and guarantees are bad bedfellows. All that we can do is what we believe to be in the best interests of all concerned.
Clause 1 deals primarily with the sovereignty issue, and there is no point in repeating all that has already been said. At this stage, there is advantage to be had by leaving a certain amount of fluidity in the Bill, certainly in respect of the nationality aspects that we shall be discussing later. I make one point in response to what the hon. Member for Hamilton said about there being some substantial time—I am sure that he is right—before we come to debate Hong Kong again. However, I am sure that he, like the rest of us, did not want to imply that by passing this Bill we wash our hands of Hong Kong and lose interest in it. We should not seek to imply either that the House will not debate, discuss, or even, if necessary, legislate from time to time on the rights of individual citizens in Hong Kong.
In this clause we are dealing with sovereignty, and it is right that this should be settled once and for all, beyond peradventure, which is what the clause does. I support it. I hope that the hon. Member for Hamilton will agree that we should let it be known to all concerned—I am sure that the Government share this view—that if, as time goes by, changes need to be made in detailed aspects of the legislation, nothing that we do tonight will slam the door irrevocably on making changes in detail that may affect the rights of individual Hong Kong citizens.

Mr. Russell Johnston: I shall be brief because we should not try to have another Second Reading debate on each clause stand part debate.
I am happy to follow the hon. Member for Christchurch (Mr. Adley), who has given a good deal of time and emotional effort to the problems of Hong Kong for some time, despite the fact that, as he said, this has led to him being criticised somewhat. From the beginning, he was on the right lines, and we should salute the fact that he was so, despite the fact that when he originally expressed his views they were not universally accepted. Secondly, I am very happy to support, as did the hon. Member for Christchurch, what the hon. Member for Hamilton (Mr. Robertson) said. He will appreciate that the House is no longer simply bipartisan. I think that my hon. Friend the Member for Stockton, South (Mr. Wrigglesworth) said that it was multipartisan.

Mr. Ian Wrigglesworth: Bipartite.

Mr. Johnston: Bipartite?

Mr. J. Enoch Powell: Cinquepartite.

Mr. Johnston: That is far too clever for me.

Mr. Powell: Count up to five—five parties.

Mr. Johnston: It is a great pleasure to have the right hon. Member for South Down (Mr. Powell) not only agreeing with me but doubling the number.
I have only two points to make. First, I support what the hon. Member for Hamilton said about the annual report—
It being Ten o'clock, THE CHAIRMAN left the Chair to report Progress and ask leave to sit again.
Committee report Progress.

BUSINESS OF THE HOUSE

Ordered,
That at this day's sitting, the Hong Kong Bill may be proceeded with, though opposed, until any hour. — [Mr. Neubert.]

Orders of the Day — Hong Kong Bill

Again considered in Committee.
Question again proposed, That the clause stand part of the Bill.

Mr. Russell Johnston: I support what the hon. Member for Hamilton said about an annual report. The view of the right hon. Member for Leeds, East (Mr. Healey) was not very clear on Second Reading. He spent a little time pooh-poohing the value of annual debates upon the Armed Forces. The Minister, who is sitting looking somewhat delphic on the Front Bench, suggested that this was an artificial exercise and that the Government, being open minded and willing to listen to argument at any time, would be only too delighted, if there were a great problem, to have a debate almost immediately. That suggestion was received by Opposition Members with a certain amount of dubiety. That dubiety has persisted. There is virtue in a regular examination of how matters are proceeding. Therefore, I hope that the Minister will reconsider the matter and will agree that a regular report to the House would be of value. I do not mean that there should be a regular report in written form, but that there should be the opportunity to have a regular debate. This House produces a great deal of material in written form which is never debated, and because it is never debated it is never read.
My second point again supports what was said by the hon. Member for Hamilton. We hope that the Minister will take this opportunity to tell the House, if he can, how he envisages the basic law will evolve. That is of fundamental importance. The clause relates to the transfer of sovereignty. We are willing to transfer sovereignty if certain conditions are met. The agreement related to the meeting of conditions. This will result in a considerable diminution, in one sense, of the outright absorption of Hong Kong by the People's Republic of China. That reflects great credit upon the People's Republic of China. However, it means that we shall have a continuing interest in how the law in Hong Kong evolves over the next 13 years. If the Minister is able to say a little more than he was able to say last time about how this will be possible, the House will be grateful.

Mr. Bowen Wells: I shall not detain the Committee for long on clause 1 stand part, but one major point needs to be made. When we hand over sovereignty in 1997 in accordance with the agreement, we will be handing over not only territory and people but also a system of government. It worries me considerably that, despite the two Green Papers issued by the Hong Kong Government, we have not sufficiently evolved the constitution of Hong Kong. In the true colonial tradition, the governor of Hong Kong has absolute power under the present arrangements there. The great merit of that system is that he is subject to the Foreign Secretary who is, of course, responsible to the House. The governor can be removed, and is removed every so often as appointments lapse and new people are appointed.
When sovereignty is handed over, that situation will no longer obtain. I know that people in Hong Kong have

serious misgivings about adopting an entirely democratic or parliamentary system that is based on the British model. There are many reasons why that may not be the most appropriate model for continuing the government of Hong Kong. However, I do not believe that the Government of Hong Kong have begun seriously to consider several fundamental issues, such as the way in which the Executive will be kept under control and ruled by a democratically elected assembly. At present it is proposed that the democracy should depend on a very low level of almost district or tenantry government as the only elected body, which then appoints members to ever more senior bodies until the Legislature is reached. But that is far too narrow a democratic base upon which to work, and from which to constrain the executive power now held by the governor and his officials.

Sir Paul Bryan (Boothferry): Is my hon. Friend saying that the Hong Kong people are worried about the period between now and 1997 or about the period after 1997?

Mr. Wells: The quick answer is both. The problem is how to evolve the new institutions in the period up to 1997, and thereafter to know how they are to work once Parliament's power is removed. The question is how are they to be evolved in a way that suits Hong Kong, the Chinese people and the way in which their traditions suggest that they can be ruled. Over the years, one problem has been the difficulty of arriving at a political settlement within China that was acceptable to its people. Consequently, there have been many disastrous wars and civil wars in China that have held back its development.
Therefore, in the next 13 years we face a difficult problem in trying to evolve Hong Kong's constitution in a way that will preserve the basic liberties that are now enjoyed by the people of Hong Kong. The fundamental division of powers as between the Legislature, the Judiciary and the Executive has not been properly considered, particularly in the case of the Executive. At present, the Executive consists of the governor with his civil servants and officials acting—as we might say—as Ministers in the Legislative Council. But they are now to be retired to the sidelines. Nevertheless, the question of how the Hong Kong people are to control their Executive remains. I would hate to see us hand over the sovereignty of Hong Kong, with absolute power being retained in the hands of a governor and an Executive without proper democratic control which guarantees the freedoms of the people of Hong Kong and which they have enjoyed so far and which will be in stark contrast to the sovereignty to which they are to submit in 1997. Without that constitutional development, the people of Hong Kong will be vulnerable to the different tradition of the sovereignty to which they will be committed.
I urge Her Majesty's Government to work with the Hong Kong Government quickly to develop the Green Paper and White Paper issued by the Hong Kong Government, tailoring it in a sympathetic way to the needs, traditions and customs of the people there. It should not necessarily be a Westminster system, but one which will enable the Executive to be controlled by the people.

Mr. Tom Clarke: The hon. Member for Hertford and Stortford (Mr. Wells) was right to focus attention on the importance of the development of democracy, in an evolutionary sense, as we approach 1997.
There is the temptation to think only in terms of 1997 and to forget that there are 12 years to go before we reach that time. I hope that those years will be used, as the hon. Member for Hertford and Stortford said, towards achieving a greater degree of democracy than has been the case hitherto.
It seems that we have been too ambivalent in our views about democracy. We must accept that existing laws must be adapted to meet the changing situation, and that situation will change rapidly as 1997 approaches. The basic law—to which my hon. Friend the Member for Hamilton (Mr. Robertson) and others have referred, and to which my right hon. and learned Friend the Member for Aberavon (Mr. Morris) devoted much of his speech when we last debated this subject—is vital. I gather that the Legislative Council agrees with that and has reservations only on the question of passports, an issue which concerns, among others, the right hon. Member for South Down (Mr. Powell).
We must give close consideration to the way in which the basic law evolves before Hong Kong begins to work, hopefully in harmony, with China in 1997. I hope that tonight we can continue to provide those concerned with an assurance that confidence on their part is not misplaced. Hon. Members on both sides of the House have an interest in encouraging confidence. That confidence is necessary, not just in Hong Kong but in relation to Hong Kong's association with China. In other words, there must be a clear understanding between Hong Kong and China as 1997 approaches.
The Committee will not be surprised to hear me say that a great test of the basic law of democratic development in Hong Kong rests on the way in which we approach the problem of the Vietnamese refugees. I remain disappointed that the Legislative Council has not managed to make that an item of major priority, bringing pressure on the British Government to respond to the Canadian and American debates about the refugees that are taking place. In dealing with this problem in the serious way it merits, we could send a message to China that we believe that it is important to develop in Hong Kong not only laws but a humanitarian approach to problems of that nature which will be an inspiration to China and encourage the Chinese to develop their own views on human rights.

Sir Paul Bryan: Is the hon. Gentleman aware that China has probably accepted more of those refugees than any other country? I do not believe that the Chinese need any lessons in that direction.

Mr. Clarke: I am sure that the hon. Gentleman is correct. None of us wants to score points, especially about China, because we are keen for the agreement to work. Hong Kong has lessons to learn. If those lessons come from China in the context of these negotiations, so much the better. I thank the hon. Gentleman for his contribution.

Mr. David Young: Both sides of the Committee want the agreement to work for the people of Hong Kong. It is a long time between now and 1997. As one of the major signatories to this agreement, Britain must maintain the confidence in Hong Kong not only of business but of the people. There must be close liaison and discussions about what is evolving in Hong Kong. There

are few democratic institutions in the region, at the moment but I think that such institutions will take off with the spur of change of sovereignty. The minority communities are deeply worried not only about passports but about the position of their children.
In Hong Kong, as in this country, people want a voice in the democratic system. I believe that hon. Members do not want just a formal debate on these matters that merely goes through the motions. This is a unique development. We are transferring over 13 years' not only sovereignty, but law, ways of life and institutions. If they are to be transferred smoothly and maintained, we need gentle touches on the tiller. Administrations in Britain and attitudes in China may change. Certain attitudes and institutions in Hong Kong will change. To retain the confidence and support of the Hong Kong people we need constant consultations between the British Government and the Hong Kong people. The results of those consultations should be reported at regular intervals of no longer than a year to the House for consideration.
We have heard of the Hong Kong people's worry about passports. At this stage, we cannot dot every "i" and cross every "t". No one challenges the good will with which we enter this agreement.
Members of the House, whatever their political differences, share an interest in the people of Hong Kong. We ask that there should be regular meaningful discussions on the Floor of the House at intervals of no more than a year. Now that we are moving towards the transition in 1997, that would be the way to gain and maintain the support of the people in Hong Kong whom it is our responsibility as Members of the British Parliament to sustain that relationship.

Mr. Ivor Stanbrook: The clause provides for the withdrawal of our claim to sovereignty over Hong Kong from 1997 provided that the Anglo-Chinese agreement is ratified and the appropriate documents are exchanged.
My hon. Friend the Member for Stevenage (Mr. Wood) was right when he said that between now and 1997—if the Bill is passed—it is important to ensure that as far as possible the internal Government of Hong Kong is arranged democratically so that power can be dispersed within the community by the time of the transfer of power rather than be concentrated, as it normally is with colonial Governments, in the hands of the governor.
I hope that the Government will bear in mind, as a matter of urgency, the needs of the expatriate Civil Service in Hong Kong. Democracy may be the objective, but there will be a need to transfer and promote indigenous members of the service into various senior civil service posts in Hong Kong. I declare an interest, because I am a former member of Her Majesty's overseas Civil Service now on pension from Nigeria.
The House is taking insufficient notice of the fact that the people to whom I refer, who have had their conditions of service confirmed and who have been assured that their pensions will be guaranteed and that their rights of transfer and promotion will be maintained before and after the transfer in 1997, will have their conditions of service changed from the date upon which the Bill becomes effective, because there will be a deliberate policy to appoint to senior posts on promotion and transfer people


of Chinese ethnic origin in preference to expatriate officers. The rights and conditions of service of serving expatriates will have been prejudiced from the word go.
The Government must arrange for those people to be able to retire with pension rights and conditions of service equivalent to those of officers in a similar position in the past when our colonies achieved independence. Previously, when colonies achieved independence, arrangements for the transfer of power were made rapidly between the final agreement with the parties following a general election and the assumption of power. In this case, there will be over 12 years of preparation. However, that is no excuse for failing to deal with the deterioration in the career prospects of members of the overseas Civil Service now serving in Hong Kong. By the time the Bill becomes an Act, their conditions of service will have changed.
I understand from my hon. Friend the Minister of State that the rights of people in the Overseas Civil Service serving in Hong Kong are under active consideration. That is fine if it means that a public officers' agreement will be concluded and announced fairly soon, on which officers in Hong Kong may depend. However, if it is thought that the decision can wait for years because the transfer is not until 1997, a great injustice will be done. Many officers will leave the service prematurely, being willing to lose such pension rights to which they might have been entitled simply because of the insecurity that faces them.
Therefore, I ask the Government in this intervening period to make a public officers' agreement with the overseas Civil Service in Hong Kong as soon as possible, such as was made in equivalent cases in the colonies when they achieved their independence, so that the officers have security and may continue to serve in Hong Kong to its benefit in whatever post they have.

Dr. John Marek: I heartily agree with clause 1. I speak not in order to criticise it; it is absolutely the right clause. It is short, succinct and easily understandable by everybody. I worry about how much of it is understandable with regard to what will happen in Hong Kong itself. I shall refer to that later.
I should like to say a few words about an annual debate or progress report. At this stage I am not particularly concerned about what form it takes, and as we have 13 years to go it would be premature to say that, willy-nilly, it must be an annual debate or a report presented as a Command Paper. It is important for the Government to say that they would make provision, if necessary, through the usual channels. There should be provision, annually if necessary, for a debate. It may not be necessary, but it is important, if there is pressure from Parliament or a significant part of the House, for this major issue to be debated.
More importantly, from my point of view, we should have a collation of information. The hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston) said that it was not so important, but I believe that it is probably more important. We have information from the press and various publications, but it would be useful if an annual report were compiled and presented to Parliament, although not necessarily debated. It need not even be published by HMSO. It might be published in Hong Kong. I am not particularly fussed about how it is done. We have many things to do, and it would be useful for us to have

something like that to take away and look at to see whether progress has been made in Hong Kong or whether there are matters for concern.
I should like to refer to consultation and getting the agreement of the people of Hong Kong to the measures that we are taking. I said this on Second Reading, but it is important to re-state it. I do not believe that all the people in Hong Kong, or anywhere near the majority, really understand what is proposed and what changes will take place, particularly what status they will have and what citizenship they will be entitled to. Such matters will hit Hong Kong as the years go by.
I do not criticise the efforts that have been made so far by the assessment office and the monitoring team, but it is vital that we continue to do our best to inform, persuade, educate and argue with people in Hong Kong about what will happen. There is not necessarily a general acceptance any more than a general non-acceptance. I do not know. I am sure that, although most Hong Kong people are apprehensive and worried, they do not really have all the information that is necessary to take a considered decision. But if the measure is to succeed, it is important that by 1997 there should be a general acceptance by the people of Hong Kong about what will happen to them.

Mr. Gerald Bermingham: Does my hon. Friend agree that as times passes various points or issues will undoubtedly arise and that as they do they should be debated? The only way to get general agreement is by general consensus and that can only come from debate. Therefore, debates should take place periodically in the Chamber.

Dr. Marek: I agree that information should be made available, but if there is general agreement I do not see the need for a debate. I am sorry if my hon. Friend disagrees, but I have no love of being in this Chamber when everybody is agreed. We should all go home early. It is important to be here when important principles are at stake. If we agree, we should not be too long, and I shall not be too long now. It is important to be here when we disagree, as we often do, but I would not insist on debates just for the sake of them.
The hon. Member for Inverness, Nairn and Lochaber talked of tripartisanship. There is one Liberal Member present. It would be uncharitable of me to stick to the tenets of bipartisanship when there are other minority parties in the House. It is important that not only the Government and the Opposition but all the minority parties should be brought into the discussions. We should all be on the same side, working for a smooth transition of sovereignty from ourselves to the People's Republic of China. We should disseminate information as much as possible and learn in advance of different thinking on different Benches, so that, if possible, we can arrive at an agreed solution. If that cannot be done, clearly, as my hon. Friend the Member for St. Helens, South (Mr. Bermingham) said, we should have a debate to decide matters.
However, I hope that such situations will be infrequent. One of the keys to a successful transition, certainly for the people of Hong Kong, is that we have a policy which has the agreement of all parties in the House. I hope that the Government will bear that in mind. Although we must


argue about some aspects, such as nationality, in the schedules, I am sure that every hon. Member will welcome clause 1.

Mr. Barry Sheerman: This is a historic and unique occasion and it would be wrong not to contribute to a debate that is of such importance to 5½ million souls in Hong Kong. Listening to the contributions this evening I am prompted to say that over the next 62 years we must be involved in a vigil for those 5½ million souls. That vigil does not end in 12 years. That vigilance, in terms of a moral responsibility, goes on and on. The link between the people of Britain and Hong Kong is far too important to believe that it can be cut off in a short period of 12 years.
Vigilance will have to be expressed through the people of Hong Kong as well as through the British people in the House of Commons and there must be an appropriate mechanism through which that vigilance is exercised. I am not particular whether the mechanism is a Select Committee or a regular debate, but the vigilance must have an expression, and an annual expression would be appropriate. The vigilance of the people of Hong Kong must be maintained and that can best be done if there is steady progress towards more direct control of their affairs over the next 12 years.
I have spoken to people in Hong Kong and I have the impression that there is much support there for a steady movement towards a greater say in their affairs and not overnight democratisation of the processes by which they live. That means a larger say for those in the middle and at the bottom of the Hong Kong social ladder and not for the most privileged. All the people of Hong Kong must have greater identification with the decisions that are made in their name over the next 12 years and we must be vigilant about their future over that period.
There must be monitoring by the British and Hong Kong peoples over the next 12 years and beyond. We shall not have much direct influence over many changes in basic law but we shall have a moral influence. In addition, we shall have a role in monitoring the implementation of the proposed process of nationality. We have seen the way in which nationality provisions often take a turn that is very different from that which was intended. There are the unintended consequences of human actions and legislation and latent Government interpretation of the law. All those who have a large immigrant population in their constituencies know the difference between individual Ministers' interpretation of the law. We must keep a close eye on the spirit of nationality law and the way in which it works through.
There will be minorities in Hong Kong who will be deeply and badly affected by the operation of the proposed nationality law. That is why there must be constant vigilance. Where grievous wrongs are identified, they must be able to be corrected. If that message goes out from the House of Commons this evening, many in Hong Kong will feel better about their future.
Our close friendship, deep interest and central responsibility will continue over the next 12 years and beyond. No people can be severed from the British nation by legislation or the stroke of a pen. The bonds of friendship and unity will continue. I hope that those who

are Members of this place and those who will replace us will keep in mind our long duty to and responsibility for the people of Hong Kong far into the future.

Mr. Ian Wrigglesworth: I also should like to welcome clause 1 and to wish the people of Hong Kong well in the process that will take them to their new status in 1997.
Success will be determined by several factors. The first is internal circumstances in Hong Kong and the development of the new system of democracy, which I, like others, welcome. That must not cause upset or disruption or fears that might affect confidence in how Hong Kong is being run. I am confident that it can and will work.
The attitude of the Government in Beijing will have a profound effect on the success of the transitional period. I shall be interested to see how sensitive to the future of Hong Kong the Beijing Government are in drawing up the basic law and in understanding how the system operates. The system is quite different from that which operates over the border and it would not be surprising if the economic life of Hong Kong were not fully understood or appreciated.
I hope that the Government will help Beijing if difficulties such as I have mentioned arise. I am sure that there is good will on both sides and that the Hong Kong Government and the Hong Kong people will be only too pleased to help the People's Republic to enable Hong Kong's economic success to be sustained.

Mr. Adley: Does the hon. Gentleman agree that there is, perhaps, a difference of view between the establishment in Hong Kong and the large number of extremely articulate young people who feel that they have not been enfranchised in any way? Is there not a danger that, by listening to the establishment, the British and Chinese Governments will fail to realise the aspirations of the young people of Hong Kong?

Mr. Wrigglesworth: I hope that the British and Chinese Governments will listen to all of the voices. I have met many young people from Hong Kong, had lively discussions with them and thoroughly enjoyed doing so. They give every hope of a dynamic and prosperous future for Hong Kong. I believe that more than 50 per cent. of the population is under 21, so the voice of that generation must be listened to. However, it is important that the more senior voices of those in prominent positions in industry, for example, should also be listened to. I am anxious that the People's Republic should understand Hong Kong's very different system when drawing up the basic law. I do not lack confidence, as China has shown such understanding in the agreement. I thought that the People's Republic would never accept such an agreement. I am therefore confident that it will be sensitive to the different system that it will have within its orbit. Nevertheless, misunderstandings could arise, and there will have to be some sensitivity towards how Hong Kong works if there is to be no damage.
It is important that Hong Kong's economic prosperity be sustained. The people of Hong Kong, especially the young ones, have become used to continuing growth such as we have not seen in Britain in post-war and many prewar years.
10.45 pm
It is important that the Government should help Hong Kong to sustain its trading relationships and prosperity in the transitional period because nothing would give rise to a flight from the economy and to greater damage to its prospects than a slump in its economic fortunes in that period.
It is important that the Government and Parliament should help Hong Kong to sustain its position in the transitional period. I do not believe that regular reports and debates, as has been suggested by some hon. Members, including the hon. Member for Hamilton (Mr. Robertson), are the best way to do that. That might give rise to all sorts of things building up in Hong Kong. Those of us who know Hong Kong reasonably well realise that if a debate is anticipated on a set date every year and a regular report, this will lead to great build-ups. As the hon. Member for Huddersfield (Mr. Sheerman) commented, if problems arise hon. Members can raise them in many different ways. This has been done in the past and the ingenuity of Members will ensure that a debate is held when problems occur.
However, that does not mean that the Government can be let off the hook and that Hong Kong's affairs should never again be debated by the House. There must be debates, but I do not like the idea of a regular debate and report which would entail discussion of Hong Kong whether or not it was necessary.

Mr. George Robertson: Although there are undoubted dangers involved in the high expectations raised in Hong Kong by parliamentary debates, it would be equally dangerous to allow a number of issues to drift along on the tide of speculation without an opportunity being afforded to raise them in Parliament. It might be preferable to have something that people could observe as an authoritative sounding board rather than reading 70 newspapers juggling round the various factors involved.

Mr. Wrigglesworth: I can see that, but it is a balance of judgment. Indeed, I do not wish matters to be brushed under the carpet or misunderstandings to occur because the House has no opportunity to discuss the affairs of Hong Kong, but the press in Hong Kong, of which many hon. Members have had experience, can be very excitable; it may misinterpret what happens in Parliament and, indeed, may expect too much of Parliament. It is not wise therefore to build up expectations unnecessarily. In my judgment, it would not be helpful for Parliament to debate and to produce reports on Hong Kong regularly. Those hon. Members who take a close interest in these matters will ensure that the subject of Hong Kong is raised in Parliament in the period up to 1997 and that its progress will be monitored carefully.

The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): As the hon. Member for Hamilton (Mr. Robertson) and my hon. Friend the Member for Christchurch (Mr. Adley) said, clause 1 is the central provision of the Bill. It provides for the termination of British sovereignty over the ceded parts of Hong Kong and the termination of British jurisdiction over the whole territory from 1 July 1997. It is therefore appropriate that the Committee should have decided to debate the matter for over an hour, raising issues that go wider than clause 1.
I appreciate the way in which the House has approached the Bill and the future of Hong Kong and, above all, the

common strand that comes through of the desire to see confidence in Hong Kong. That was the clear desire on both sides of the House.
I am grateful to the hon. Member for Hamilton for welcoming the time lag between the Second Reading and Committee stages which we effected after listening carefully to the suggestions that he and other hon. Members made that there should be more time to consider the Bill before the Committee stage. I shall try to answer the points raised as clearly as I can to enable the Committee to proceed to the other issues.
The point that has come through most strongly tonight, as on Second Reading, is the question of accountability to the House. My right hon. and learned Friend the Foreign Secretary and I have given this a great deal of thought. As hon. Members will recall, on Second Reading we had considerable reservations about having an institutionalised system in the form of an annual report and debate. We thought that that would not necessarily accord with the demands of the situation. It is worth recalling, too, that this is the third debate on Hong Kong in two months, although I appreciate that there are special reasons for that which will not apply in future years.
My right hon. and learned Friend and I have responded to the views of Members in all parts of the House in deciding that an annual report on Hong Kong will be produced by the Government and laid before Parliament. The exact form has not yet been decided and the matter is to be discussed further with the Governor of Hong Kong, but it is expected to include a general account of developments in Hong Kong during the preceding year.
The hon. Members for Hamilton, for Huddersfield (Mr. Sheerman), for Wrexham (Dr. Marek), for Inverness, Nairn and Lochaber (Mr. Johnston) and for Bolton, South-East (Mr. Young) have all raised important points. The Select Committee on Foreign Affairs is bound to take a close interest and the Government stand ready to cooperate with it. If it wishes to look into issues from time to time, we shall do our best to co-operate.
As to whether there should be a debate on the annual report, the House may wish to judge whether a debate is desirable or useful in the light of the report. If the House takes that view the matter can then be pursued through the usual channels. Equally, the Government or the House may judge on some other occasion that a debate should take place because something special has arisen.
I hope that my comments will be of some help to the House and will show that it is the Government's desire to co-operate as best we can. I appreciate the importance of the House continuing to take a strong interest in Hong Kong throughout the period in which the Government have a clear responsibility for Hong Kong, certainly until 1 July 1997.
The hon. Members for Inverness, Nairn and Lochaber and for Hamilton referred to the basic law. The situation in that respect has not changed substantially since Second Reading. Drafting the basic law is clearly a matter for the Chinese Government, but they have made it absolutely clear that they will consult Hong Kong opinion on a wide basis. The mechanics of the consultation are not yet clear and this is a matter for the Chinese Government, but we welcome the fact that they have expressed the clear intention to consult Hong Kong opinion.
The hon. Member for Hamilton referred to international trade agreements. As he knows, provision is made for the special administrative region to continue with very


important agreements such as the GATT, and the provisions for the Joint Liaison Group specifically mention the need to discuss how special arrangements can continue for GATT and other international agreements.
The hon. Member for Stockton, South (Mr. Wrigglesworth) spoke of the Hong Kong economy, which is doing extremely well in terms of growth and exports. I am sure that continuity of international agreements is an important factor in that.
My hon. Friend the Member for Hertford and Stortford (Mr. Wells) and the hon. Members for Stockton, South and for Huddersfield talked about democratic institutions and the pace of progress in that respect. As the House knows, the first indirect elections will take place in September this year for part of the Legislative Assembly. Looking back to the debate of 5 December and to Second Reading, I believe that it is the general view of the House that it is best to proceed cautiously towards the fullest degree of democratic accountability by the Executive, and that is what we are doing, taking the views of the people of Hong Kong very much into account. As the House also knows, there will be a further review of the democratic institutions and the constitution in 1987 in the light of the experience of indirect elections in the next two years. Obviously, the House and, above all, the people of Hong Kong will have another opportunity to express their views.
The hon. Member for Monklands, West (Mr. Clarke) raised an important point about Vietnamese refugees, of which I am aware. It has a bearing on this legislation because it also affects the confidence of the people in Hong Kong. I did not answer him on Second Reading because of the lack of time. We give the matter high priority. There are still 11,900 Vietnamese refugees in Hong Kong. I pay tribute to the people and Government of Hong Kong for the way in which they have tackled this major problem. They have coped with no fewer than 100,000 refugees since 1979, and they have done an admirable job in extremely difficult circumstances. The Sub-Committee of the Select Committee on Home Affairs is taking evidence on that. I gave evidence this week. We look forward with great interest to its report.

Mr. J. Enoch Powell: On 25 July the Minister gave me an extremely informative analysis of the present population of Hong Kong. One of the sections referred to 4,500 stateless persons of non-Chinese race, most of whom originate from Vietnam, Laos and Cambodia. Does the 100,000 that he mentioned include that figure, or is that figure included in the 95,000 other foreign nationals?

Mr. Luce: Those 4,500 people are quite separate. At present they are stateless people. I think that 11,900 people are classified as refugees, who are foreign nationals. I am subject to correction on that. They are the clear responsibility of both the Hong Kong and British Governments, and it is our objective to find a durable solution to the problem.
My hon. Friend the Member for Orpington (Mr. Stanbrook) made an extremely important point about the officers in Her Majesty's Overseas Civil Service in Hong Kong. He reminded the House that he served in the Overseas Civil Service, as I did. The agreement on the future of Hong Kong provides satisfactorily for the continuity of service by serving officers in the public services in Hong Kong on terms and conditions, including pay and pensions, no less favourable than on the 30 June 1997. Those provisions apply to members of the Overseas Civil Service serving in Hong Kong and other civil servants. The resumption of sovereignty over Hong Kong by the People's Republic of China raises similar issues in respect of the Overseas Civil Service, as independence has in other dependent territories. With that in our minds, we address ourselves to questions about their futures. I know that my hon. Friend will retain a close interest.

Mr. Stanbrook: I shall certainly do that. However, with respect, my hon. Friend has not grasped the point, which is that once the documents are exchanged and the Bill is enacted the conditions of service for all expatriate officers serving in Hong Kong will have been changed because from then onwards the policy will naturally be to promote as many people of Chinese origin as possible. That will mean that, if the qualifications of an expatriate and local officer are equal, when they apply for a post, the local officer will almost certainly be promoted. That has an adverse effect on career prospects, with a subsequent loss of morale, unless such staff now receive the sort of guarantees of security which others have had in colonies in the past.

Mr. Luce: I appreciate my hon. Friend's point. The Hong Kong Government are reviewing the number of people in the Overseas Civil Service in Hong Kong, and they will consider the numbers in the years to come. I assure my hon. Friend that we take his points on board and that we are considering those matters urgently.
I have tried to answer the debate as best I can. I hope that I have answered it sufficiently to be able to commend the clause to the House.
Question put and agreed to.
Clause 1 ordered to stand part of the Bill.
Clause 2 ordered to stand part of the Bill.

Schedule

SUPPLEMENTARY PROVISIONS

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Mr. J. Enoch Powell: I beg to move amendment No. 1, in page 2, line 9, leave out paragraph 2.

The Chairman of Ways and Means (Mr. Harold Walker): With this it will be convenient to take Government amendment No. 2 and the following amendments:
No. 3, in page 2, line 17, leave out
'new form of British nationality'
and insert 'status'.
No. 4, in page 2, line 18, at end insert
'and
(c) a British Dependent Territory citizen who has a connection with Hong Kong may have the option of being given a multiple access visa stamp in any existing British Dependent Territory passport'.

No. 5, in page 2, line 18, at end insert—
'(c) persons possessing that status may obtain a travel document.'.

Mr. Powell: I have the honour to move the amendments also on behalf of right hon. and hon. Members of the official Opposition.
Earlier, the hon. Member for Hamilton (Mr. Robertson) informed the Committee how closely in Hong Kong the proceedings on this subject in the House are followed. I can verify that from some information which the hon. Gentleman gave me, and which I hope he does not mind me quoting. He told me that when, on examining the Order Paper, my name was seen to be not only there but above the name of the right hon. Member for Leeds, East (Mr. Healey), a frisson of alarm ran through the population of that colony. The hon. Gentleman confirms what I say. Therefore, it is incumbent upon me to do my best to damp down those anxieties by explaining that there is a simple reason for this unusual juxtaposition; I got there first.
As you will realise, Mr. Deputy Speaker, in the group of amendments that you have so wisely recommended the Committee to take together, two separate matters are raised. One is raised by the amendment that I have just moved, and on which I understand it is in order for the entire debate to take place—that the alterations in our law of citizenship, which are authorised by paragraph 2(2) of the Schedule to be made by Order in Council, should be made by substantive legislation. Only substantive legislation can permit the careful examination, clause by clause and detail by detail, of a change in the law on so important a matter. Apart from alterations from time to time in schedules to British nationality legislation, I believe I am right in saying that at no time has an alteration been made in the law of British nationality than by substantive legislation.
Therefore, I was happy to join the official Opposition in urging upon the Government that, instead of proceeding by Order in Council under this paragraph of the schedule, they should proceed by legislation. If they are anxious about time, in recognition of the importance of the subject, no doubt the House would be willing to facilitate the consideration of a Bill, which would be the only proper way to do it.
Perhaps a bargain has been struck between the Government and the Opposition Front Bench. I do not know. Perhaps the Opposition Front Bench—

Mr. George Robertson: No.

Mr. Powell: The hon. Member for Hamilton says no, and of course I accept that immediately. But suspicions keep recurring in one's mind, especially when one realises how difficult it is for an Opposition, in the circumstances of the present Opposition, to provide themselves with sufficient troops to carry a point to a Division and to make a reasonable showing in the Lobby. I realise that 1 am considering a theoretical possibility, but the Government might make the suggestion that a special procedure might be followed—indeed, this was mentioned in the debate on Second Reading—to facilitate the consideration of the Order in Council which the paragraph envisages. A green-edged, green Green Paper or something of the sort might be considered.
An hon. Member from Northern Ireland is qualified respectfully to advise the Committee on this point of procedure. We have the misfortune, under direct rule, that substantive law is made for the Province under Order in Council. However, the extreme severity of that method is modified by the fact that it is normally, although not invariably, the practice to publish what are called proposals for a draft Order in Council. If the Government were to say that they had something of that kind in mind, it might go some way to assuage the anxieties in the mind of the Opposition, and I would urge caution. The existence of a document that is not itself a draft of an Order in Council makes it possible for that document to be discussed, and for differences to be made in that document and in the eventual draft when it is made, without the Government appearing to lose face as they would do if they had to withdraw a draft and replace it by another.
However, I am afraid that whatever the good will with which this operation is conducted, and however frank and candid the discussions that take place, either in the course of the debate or more informally on such a document as proposals for a draft Order in Council, it is impossible, by the nature of the document, for the House to have the opportunity of considering severally the several aspects of the changes in law that are brought about. Even if the Government, as I hope that they will, go at least as far as to say that they will publish the draft Order in Council in proposal form, and give the House the opportunity to debate those proposals, I would still say, and place on record, that it is an unsatisfactory method of proceeding in legislating for citizenship.
The other topic is the new form of British nationality that is envisaged in paragraph 2 of the schedule, from which amendment 3 results. There is a curious story that lies behind the paradoxical proposal of Her Majesty's Government that, on relinquishing sovereignty over Hong Kong, a new sort of British nationality should be invented to be conferred upon up to 3 million of the present inhabitants of that colony. This is an act so paradoxical and so curious that it naturally provokes a certain conjecture as to how it might have come about. I have done a little careful, microscopic reading of the White Paper, which is one of the few public documents that we have to enable us to reconstruct the processes that may have preceded this extraordinary outcome.
There were such processes, and they were difficult processes. Earlier in these debates, we were told that the


present proposals are the ninth in the series, there having been eight previous proposals that, for one reason or another, failed to stand up to whatever considerations were brought to bear on them. The Committee would do well to look carefully at the references to this proposal in the White Paper.
As you appreciate, Mr. Walker, the arrangements for a change in British nationality are no part of our agreement with the Government of the People's Republic of China. They are merely dealt with in an associated exchange of memoranda, which is the crosshead to paragraphs 62–65, the last paragraphs of the White Paper. The first three of those four paragraphs describe the position of Her Majesty's Government on the subject. Paragraph 65, the last — of Revelations, one might say — describes the Chinese position, and sheds a little more light upon the story that lies behind the curious and paradoxical proposal that we are considering. May I read it to the Committee, with commentary.
The Chinese memorandum states the Chinese Government's position that Hong Kong Chinese are Chinese nationals.
Certainly. That is self-evident and follows logically of its own accord. It is in accordance with that that
British Dependent Territories citizenship cannot be retained or acquired on or after the relevant date by virtue of a connection with Hong Kong.
Since Hong Kong is no longer a dependent territory, no doubt the Chinese pointed out that it would be inappropriate—because they are not entirely insensitive to the nuances even of the English language; they are subtle interpreters of language and its implications—for that status to be retained. Accordingly, and very necessarily and logically, we conceded that point in paragraph 2(1)(a) of the schedule. The White Paper continues:
It"—
that is the Chinese Government—
indicates, however".
May I pause there for a moment. Why do the Chinese Government indicate when they have stated their position that Hong Kong Chinese are Chinese nationals? I should be glad to hear whether the Minister and his advisers think that there is any difference of emphasis or nuance between the words "state" and "indicate". At least "indicate" is a much more general and a much more stand-offish expression that a statement on the part of a Government. But what is it that the Chinese Government, we are told, indicate?
It indicates, however, that those Chinese nationals who hold British travel documents may continue to use them after 1 July 1997".
That is all that the Chinese said—rather, indicated. I must not get it wrong. The Chinese indicated that their own nationals who happen to have British travel documents may continue to use them after 1997.

Mr. Adley: The right hon. Member for South Down (Mr. Powell) refers quite properly to the difference between "indicate" and "state". He used the words "paradoxical" and "curious". Will the right hon. Gentleman agree with me that the Bill does not seek in any way to confer United Kingdom citizenship upon 3 million people but that it is trying to supply the citizens of Hong Kong with some form of legitimate document to enable them to travel outwith Hong Kong but not to reside in the

United Kingdom? Does the right hon. Gentleman think that that is a legitimate objective for the Government to try to achieve?

Mr. Powell: The intervention of the hon. Member for Christchurch (Mr. Adley) has allowed me to anticipate exactly the next stage of my argument. I have succeeded, I hope, in establishing that the Chinese Government indicated that so far as they were concerned they would have no objection if their nationals who could get hold of them got hold of British travel documents and used them, except in the circumstances that are set out in the remainder of the paragraph. Therefore, one naturally asks what we are doing in implementation of this understanding to provide those persons who have hitherto had a curious sort of citizenship, British dependent territories citizenship, with British travel documents.
Why is it that this Order in Council is not an Order in Council that will create a status of those who can have a British travel document? As the hon. Member for Christchurch said, it does not confer United Kingdom citizenship. There is a reason for that. There is no such thing in our law as United Kingdom citizenship. But it does something perilously close to what the hon. Gentleman was indicating — I have used the word myself! It creates a new form of British nationality. So it confers British nationality. Perhaps the Minister will explain—it would be most interesting, and would be quoted in future textbooks on the law of British nationality, some of which will I hope be written by my hon. Friend the Member for Orpington (Mr. Stanbrook)—that it is impossible for this country to give anyone a travel document that could be described as a British travel document without conferring British nationality on him.
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I have offered the Minister the opportunity to prepare himself to meet that daunting inquisition by placing upon the Order Paper illustrations of how an Order in Council might have been empowered by the schedule to give the Government the power to issue British travel documents conferring certain rights in British consulates and so on to persons of a defined class or status. But that is not what is happening. That is what the Chinese indicated they would put up with. But instead of that we have invented a new form of what, over and over again, we go out of our way to call British nationality, in order to confer it upon up to 3 million of the inhabitants of Hong Kong to be enjoyed by them after the cession of the territory. I do not think that I exaggerate in describing that as a most paradoxical and curious proposal.
I wish to go a little further into what might be the reasons for that proposal. Presumably someone did not think that a British travel document was good enough. Someone was dissatisfied with a British travel document. Who was it? Who said, "No, that won't do. That's not good enough. We want British nationality."? Who insisted on British nationality being conferred on up to 3 million of the Hong Kong people? It was not the People's Republic of China. Indeed, the astonishment is that its national sensibilities were not offended by the Government openly conferring British nationality on up to 3 million of its Chinese nationals. But I shall come shortly to why their offence was not carried to a point of mortal objection, although that objection may after all be concealed. We may one day find that that repugnance is concealed under the very cautious words of the "indication" in paragraph


65 of the White Paper, which does not go to say that the Chinese Government take no objection to our conferring British nationality upon their nationals.
So who was it? There is only one cui bono here, and that is the Hong Kong people themselves—those whom we were anxious to carry along with us in the general agreement, and who were able to persuade us not to rest satisfied with providing them with what the Chinese indicated they might have, but to provide them openly and expressly with British nationality and passports. That is the terminology. From their point of view what was the difference? The Government have explained to the House that there is no difference, and that the new-fangled sort of British nationality will confer no sorts of rights except those that a travel document would confer. Why, then, was it so important to the people of Hong Kong to be given what is described as British passports and British nationality?
The answer is that they believe that, armed with that, in certain circumstances they can mobilise opinion inside and outside this country to enforce on a future Government of this country the concession of rights which do not attach to that status but which, it will be argued, are the natural implications of anything which is called a British passport or British nationality. If that is how it looks from the point of view of the Hong Kong people. I find it a little sinister that as yet it has excited no repugnance on the part of the People's Republic of China.

Mr. Andrew Rowe: Is it not equally plausible that the reason why the citizens of Hong Kong sought this additional phraseology is that they believe that the travel document to which they would become entitled would receive more respect from those countries which they might wish to enter carrying that document if it contained that additional phraseology?

Mr. Powell: We know that this form of British nationality will confer no additional rights on them. It is in the power and capabilities of the House to confer on Her Majesty's Government the right and power to produce the most impressive documents, loaded with all sorts of minatory and monitory abjurations to those before whom they might come.
That could be done almost in the style of the old passports which we used to be so proud to carry, in which Her Majesty's Principal Secretary of State called upon all kinds of lesser breeds without the law to extend all sorts of courtesies and protection to those who travelled under that illustrious patronage.
There would be no difficulty in doing that. The point is—and the people of whom I speak are by no means lacking in shrewdness—that they perceived that there was an essential difference for certain purposes between having British nationality and just having what the Chinese Government had indicated that they would not object to. Therefore, I return to the question: why did the Chinese Government not object to our going out of our way, beyond what they had conceded, to confer our nationality on their nationals?
I believe that they believed that for them, too, it might be convenient one day. They thought that if one day they found themselves somewhat embarrassed by some of the people in this category, it might be easier, more expeditious and more comfortable to dispose of them under the description — which we could not deny

because it would have been our description—of British nationals than if they were merely Chinese nationals who held British travel documents.
A fraud is being perpetrated by three parties in league together. One is the Foreign Office, as usual. I think I see the Minister shaking his head in dissent at that reference to the Foreign Office. I should have thought that he had been there long enough to have found that out by now. The second is the People's Republic of China and the third are the representatives of the Hong Kong people who have been engaged in these negotiations.
They have put their heads together and have cooked this up to deceive the House and the people whom we represent, to deceive the House into supporting that nothing of any importance or significance, nothing that may ever rebound on them in the future, is being done or is being proposed. That is being done, and we should have the opportunity—in the form of considering this matter in legislative terms—to expose it further than I have been able to do in the debate on the schedule. At least, for the record, I have put it in evidence.

Mr. George Robertson: The right hon. Member for South Down (Mr. Powell) has created a climate of hostility to the cause he has promoted by the very fact that he has promoted it. I believe that, 8,500 miles away, the people of Hong Kong do not treat the matter lightly. We have heard, as ever, an interesting exploration of the logic and illogic that can be demonstrated by a master of the art, building one premise on the other and coming to an inexorable conclusion which we all know instictively to be wrong.
The right hon. Member did the cause of an important principle a grave disservice by the accusation that he flung at the perpetrators of this "fraud". I am glad that I was left out of the catalogue of those who seemed to be involved in this deception of the House of Commons. This is the Committee stage, and the right hon. Gentleman has the right to re-enter the debate any time he chooses. Perhaps, by the end of my speech, I shall be added to the pantheon of those who would perpetrate this historic fraud.
On Wednesday 23 January the press comments collected by the Hong Kong Government for the benefit of hon. Members reported:
Sing Pao and Sing Tao Jih Pao reported that five MPs including George Robertson"—
I like the order in which the names are listed—
Denis Healey, Enoch Powell and Donald Anderson would seek amendments to the Bill at the committee stage to require a debate in both Houses of Parliament on the nationality of Hong Kong residents. Sing Tao quoted sources close to the House of Commons as saying that the chance of success of these amendments was very remote because experience showed that Bills were normally passed without amendments at the committee stage.
It is interesting to note that the Chinese language newspapers have managed to look carefully at practically all the legislation—

Mr. J. Enoch Powell: Not the Representation of the People Act.

Mr. Robertson: —with the exception of the Representation of the People Act, which comes up for later consideration.
The right hon. Member for South Down made the valid point—some of my hon. Friends will make that same point later—that the way in which the Government have chosen to create a new nationality has disturbing


implications. It is true that never before has Parliament created a new nationality by means of an Order in Council. There are good precedents in statute law showing that nationality should be created by amendable legislation—legislation which is capable of being scrutinised and which has the safeguard of being difficult to pass through the House of Commons and, therefore, is not lightly undertaken by any Government.
The Bill creates a new nationality and that is a major and serious matter. There is an increasing number of nationalities and they were all enshrined in the British Nationality Act 1981 which received the detailed scrutiny of the House, and which contrary to reports in the Sing Pao newspaper was amended substantially in Committee.
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My final objection is that anything that is created by statutory instrument or Order in Council can be easily amended or removed if circumstances change. It provides inadequate long-term security for those people fortunate or unfortunate enough to find themselves under the title designated within the Order in Council.
Those are serious objections to the way in which the Government have chosen to create this new nationality, and it is only right as the right hon. Member for South Down fairly said to place those objections on the record. The official Opposition might be prepared not to divide the Committee on this central issue, but with those words I have no doubt entered the list of those involved in the gigantic fraud.
The first precondition to the Committee accepting that exception to the normal rule has been conceded by the Government in their amendment No. 2 by which it is proposed to include the nomenclature of the new nationality in the Bill. A further assurance must be given by the Government on that exceptional circumstance before the official Opposition will be persuaded that to divide the House might not be in the best interests of those affected by the Bill.
The Government must assure the Committee that the Order in Council will not be dealt with in the conventional way and that a draft of the draft statutory instrument will be available to the House and the people of Hong Kong which should preferably be debated in the House before the final draft statutory instrument is laid before the House. That would provide an opportunity to scrutinise the detailed nationality proposals so that hon. Members and those people who will be affected can express their views. It would also give the House a better opportunity to express strong views on the contents of the statutory instrument than the more limited opportunity available when a draft statutory instrument is laid before the House.
The Government must provide sufficient time between the various stages of the legislation to allow those people who are unaware of Parliament's intricacies to discuss the Government's proposals and to rehearse their arguments of the past 10 days more pointedly as the new passports will be available long before 1997.
The Committee expects an assurance from the Government this evening — I accept the limitations placed on any Government committing themselves and their successors—that any future changes in the Bill will not be effected simply by an Order in Council.
I have no doubt that the forensic skills of the right hon. Member for South Down will be applied to my plea that the limitations are considerable. However, the people of Hong Kong have a right to expect this from the Government who gave them the assurance in the first place and who negotiated the joint agreement and its annexes. They have the right to expect that in the foreseeable future the British Parliament will not indulge in any changes to the nationality based on temporary circumstances.
The other factors that would lead the Opposition not to divide the Committee are largely conditioned by opinion as expressed in Hong Kong. There are no fully democratic institutions in Hong Kong, and we are therefore at a disadvantage in expecting views to come forward with great authority, but inasmuch as opinion has been expressed, it appears to be in favour of the methods adopted by the Government in the Bill. However, I have a suspicion that the enthusiasm for the Order in Council has less to do with the constitutional mechanism put forward by the Government than a faith in the Government who gave the promise and a fear of the Parliament that includes the right hon. Member for South Down.

Mr. Bermingham: A new form of nationality will be created by Order in Council. I agree that the matter should be debated, and primary legislation rather than an Order in Council should be used. Does my hon. Friend agree that the new form of nationality creates a situation analogous to that in east Africa, in respect of those who are not ethnic Chinese in Hong Kong? I understand that there are some 6,000 Indians, for example, who might find themselves in the invidious position in which the Asians found themselves in east Africa, at a future juncture. That, too, should be covered by the orders that we make.

Mr. Robertson: I am grateful to my hon. Friend. I shall come to some of the details. I am now dealing with the principle. My hon. Friend made a point about some of the ethnic minorities in Hong Kong. In fact, he is referring not to the 6,000 people of Indian origin, but to their children after 1997, but I shall cover that point later. It is extremely important.

Mr. Andrew Faulds: This was a matter that was raised in earlier debates and I think that the figure was 6,000 Indians. It is nothing to do with their children. It is Indians who are living possibly outwith Hong Kong at the moment, but are under the Hong Kong legislation as it presently exists, as the responsibility of the British Government. I understood from a commitment that the Minister gave excellently that those people's interests would be covered—I hope that the Minister will nod his head—by the arrangements that were being made.

Mr. Robertson: I have a faint feeling that that question was directed not to me but to the Minister—

Mr. George Foulkes: He nodded his head.

Mr. Robertson: The Minister nodded his head in reply in the time-honoured fashion of Parliament. We shall come to that matter. I assure my hon. Friend the Member for Warley, East (Mr. Faulds) that I shall be looking for precisely the same assurances that he is seeking.
I return to the reasons, Sir Paul. I apologise for the fact that in my intervention on clause stand part I omitted your knighthood, which is an honour well earned.
For whatever reason, opinion as expressed in Hong Kong has crystallised round the idea of the Order in Council. It is a fact that there would be a misunderstanding that would be difficult to clear up if we were to seek to divide the House on this important issue. In many ways I regret that those misunderstandings have arisen. I regret that different views are now held about a constitutional and procedural issue in that regard, but we must live with it. The general non-partisan view that has been taken of the Bill up to now might conceivably be damaged if we were to seek to divide the House on a point of principle this evening.
The final reason on which I base my case for not contesting the Bill, although placing our reservations on record, is the fact that there are unique circumstances in Hong Kong. This is a unique agreement, a unique joint declaration and a unique situation will apply after 1997. Perhaps it is to expect too much that uniqueness itself will be a protection in future which can be discounted when precedent is quoted against us. It is a reality that we must live with and we should bear it seriously in mind.
A number of detailed questions have been asked in Hong Kong and I am sure that the Minister would want to give some assurances to the House this evening. The Legislative Council had a debate less than 24 hours ago in Hong Kong. It raised a number of points and I see from the telex today from the Hong Kong office that the Hong Kong Chief Secretary gave a number of interesting reassurances in that debate. It is right that some of those matters should be raised here so that the Minister, with whom the buck stops, can authoritatively tell the House and those who are watching us what the position is.
First, there is the question of the acceptability of the new British national overseas passports in third countries. That has arisen on many occasions in the Hong Kong press and was mentioned during the debate in the Legislative Council. The Government are in no position to give absolute guarantees and it would be unrealistic to expect them to do so. On the other hand we have a right to ask the Government what they are doing to ensure that the new passport will be acceptable to immigration officers all over the world. Specifically, what will the Government do as a gesture to show that acceptability should be the norm? Will the Government make entry into the United Kingdom by British national overseas passport holders visa free? Will they give them unrestricted entry and exit? Without that it is difficult to see other countries giving open entry and exit.
The second point is the question of identity cards being required alongside the passport in order to prove that the holder of the British national overseas passport has the right of abode in Hong Kong. That was not cleared up on Second Reading and it has concerned people in Hong Kong newspapers and in the Legislative Council yesterday. There is some confusion which was not cleared up by the Chief Secretary. Yesterday, he drew attention to section 14 of annexe 1 to the Sino-British joint declaration which provides for the holding of permanent identity cards to be stated in the future BNO passports as evidence of right of abode, and said that Her Majesty's Government would be discussing with the Chinese authorities the wording of the statement with a view to ensuring that BNO passport holders would not have to produce their identity cards for immigration clearance.
The confusion is illustrated by a variety of statements that appeared to be emanating from authoritative sources.

Some newspapers in Hong Kong on Monday 28 January quoted Principal Assistant Secretary for Security, Regina Ip, who said that local residents would not need to take with them their Hong Kong identity cards when travelling abroad to prove that they had the right of abode in Hong Kong as that would be stated in the new British national overseas passports. She added, interestingly, that the United Kingdom Government would seek an agreement from other countries for the exemption of visas after the new nationality title was approved. It would be interesting to have the Minister's comments on that.

Mr. Stanbrook: Is the hon. Gentleman not ignoring the fact that after 1997 those to whom he is referring will be entitled to travel with British national overseas passports and will have an entitlement also to carry with them Chinese passports? Would they not be acceptable around the world by then? Why should he be so concerned about the acceptability of a species of British nationality passport which we all know is not 100 per cent. British?

Mr. Robertson: The form of passport that they will hold as Chinese nationals has not yet been resolved. They will have the right to carry a special administrative region identity card. The question whether one document will suffice seems to be taxing the people of Hong Kong. I am expressing anxieties that seem to be the subject of wide expression in Hong Kong. It appears that they wish to know whether they will be able to use one passport or the equivalent of two passports to prove that they have the right of abode in Hong Kong. As this is a source of anxiety and concern in Hong Kong, it is something that can be clarified only by the Minister when he replies rather than by his proxies on the Legislative Council in Hong Kong.
I am sure that the right hon. Member for South Down will find enormous interest in the debate which has taken place in the Chinese press over the Chinese interpretation of the new nomenclature. The translation from the English of "British national overseas", which seems remarkably clumsy in any event, appears to create some bizarre formulation which is not comprehensible in my pronunciation. The Chinese writing apparently creates confusion between the words "nationals", "citizens" and "subjects". We are told the Left-wing lawyer Dorothy Liu has been quoted as saying that it would be more appropriate to translate "British national overseas" as—there then follows a string of Chinese characters. The literal British translation of those characters is "British (overseas) subjects". The commentary of Wen Wei Po—that is a pro-Chinese newspaper in Hong Kong—quoted an English/Chinese dictionary and stated that the word "national" means — there then follows a string of hieroglyphics—
(subject of a country, in particular those living overseas).
It is said that Miss Liu's proposed translation could reflect the spirit of the proposed declaration more accurately but there is at least some room for confusion. It is conceivable that the title "British national overseas" was devised out of a knowledge of the Chinese language rather than out of a use of the English language.

Mr. Adley: May we not deduce from what the hon. Gentleman has said the very point that I tried to make in the previous debate, which was that we should not make an attempt to write in too much detail at this stage, which would risk the sort of misinterpretation which he has well


illustrated? We all understand the fears and concerns of those in Hong Kong, but does the hon. Gentleman agree that some of those who have been pressing so hard for so much seem still to fail to realise the difficulties in nuance that could result from pressing for too much too precisely and too quickly in the way that the hon. Gentleman has illustrated?

Mr. Robertson: That is one version. The hon. Gentleman has a long pedigree in terms of Chinese relations. The problem is that the people who are creating the confusion are on his side of the argument. I agree that we must not allow ourselves to get too bogged down or encourage people in Hong Kong to get too bogged down with detail when their futures must be based on trust. Nevertheless, we are dealing with a Bill that concerns nationality, which people in Hong Kong deem important. If there is confusion, the Government should make the matter clear.
The Government have given guarantees for people who, without the agreement, would appear to end up with no form of statehood. We are told that they are to be given British overseas citizenship. The paradox is that, in one respect, the Joint Council for the Welfare of Immigrants finds itself in the camp of the right hon. Member for South Down. I am sure that is the first time that that has happened. The council has made it clear that British national overseas and British overseas citizenship are not really nationalities but travel documents. I hope that the Minister is now better able to identify his plans to deal with the 6,000 prominent non-ethnic Chinese British dependent territory citizens who happen to be of Indian origin, and others who will find that they are stateless after 1997. They need reassurance from the Government tonight.
The Minister has said that he seeks a durable solution for the Vietnamese refugees in Hong Kong. The sooner we hear what that solution is, the better. I pay tribute to the Government of Hong Kong for its treatment of the 100,000 boat people who fled Vietnam. The residual problems of the 10,000 who remain, however difficult, cannot detract from the huge humanitarian effort that the Hong Kong Government mounted. My hon. Friend the Member for Monklands, West (Mr. Clarke) and I visited a camp and saw the pitiful conditions. The people there do not benefit from the stability and prosperity of the free enterprise system of Hong Kong. They have little past and a bleak future. The House should give them early assurances about their future.
We must consider those who are able, because of their Government service, to register for full British citizenship. The Government have said that they will be generous with people, especially in the security services, who might have reason to fear the transfer of sovereignty. The Government have not been specific about the numbers who might be involved and the extent of the generosity that might be accorded. We know from what we are told that a number of people are very apprehensive about the future. Given that the generosity of the Government in this regard has not been notable in the past, some further assurances this evening would go a long way to reassure them that their future is guaranteed.
These are a few of the questions and issues that have been raised in Hong Kong to which the Committee deserves answers this evening. I ask them in no

controversial or combative way. These matters need to be put on record, and a much wider public outside is waiting for the answers.

Mr. Michael Marshall: I am glad to follow the hon. Member for Hamilton (Mr. Robertson) and, indeed, the right hon. Member for South Down (Mr. Powell), because, in the course of their contributions, a number of points were raised which, in a sense, broadened the queries that I seek to pursue in relation to amendment No 4 standing in my name. In tabling the amendment, I had no prior knowledge of amendment No 2. I am in some difficulty in judging precisely the effect of amendment No 2. I am sure that when my hon. Friend the Minister replies he will want to take into account not only some of the questions that have been raised so far, but, I hope, what I am about to put to him. The suggestion encompassed in amendment No 4, in the light of some of the problems about which the right hon. and hon. Gentlemen have spoken, I hope will contribute to overcoming some of those difficulties.
The right hon. Member for South Down in his waspish and witty way was pointing to some unanswerable questions in my view. There are practical issues involved here, on which he touched, and I should like to think that what I am about to outline will provide a practical way out of some of the difficulties.
In my view, we are now in danger of getting slightly confused about which kind of passport and what sort of citizen we are referring to. What I have referred to in amendment No 4 as British dependent territory citizen passport (Hong Kong), to give it its full title, I shall refer to as BDTC for the purpose of my remarks. I recognise, however, that if Government amendment No 2 is agreed to, we shall be talking about BNO passports.
With relation to BDTC passports, and to put that into perspective, on the figures given to me by the Hong Kong Government Office in the helpful briefing that was arranged, I note that that covers current holders of just over one million and, for those eligible but who have not yet applied, two million. It is the largest group of passport holders in Hong Kong and is to be contrasted with the 18,000 British citizen passports of those who have the right of abode in the United Kingdom as opposed to the figure of some three million who have the right of abode currently in Hong Kong but not the right of abode in the United Kingdom, although they have the rights of access. To round off those categories, there are travel documents covering an additional one million people mainly through certificates of identity.
The purpose of amendment No. 4 is to facilitate the entry into the United Kingdom of those Hong Kong Chinese residents who in my judgment have a particular role in the relationship between our two countries. This tends to be a matter of the frequency of visits of many of the people whom I have in mind. Secondly, I seek to help create a system which recognises the needs not only of those who travel backwards and forwards between Hong Kong and this country at present, but, even more important, of those who will do so after 1997. Thirdly, I should like to think that what I suggest would help to begin a process of accreditation which will influence the thinking not only about visitors from Hong Kong but British visitors to Hong Kong and the People's Republic of China in the years after 1997.
My concerns in putting forward the suggestion stemmed from two sources. One was the visit that many hon. Members paid in recent weeks to Hong Kong, courtesy of the Hong Kong Government, during which we learned of some of the practical problems. The second arises — and I declare my interest as parliamentary adviser to Cable and Wireless Ltd—from some of the examples of difficulties which, as I know from my experience, Cable and Wireless and other companies deeply involved with Hong Kong and China have had in the past.
The problem to which I refer relates essentially to BDTC passport holders coming to this country on a regular basis who find themselves constantly subject to quizzing and cross-examination as to the purpose of their visits. They are not included in statistics which merely show those refused entry. It is not just a matter of immigration officers who may have got out of the wrong side of bed. For the perfectly legitimate visitor, a dialogue of misunderstanding may occur that is time-consuming and causes disproportionate offence to many people who have important reasons to visit this country, especially in the pursuit of trade and investment between Hong Kong and the United Kingdom.
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The problem is not confined to business visitors. My attention has been drawn to the number of Hong Kong officials who have also been required to explain in considerable detail why they visit this country so regularly and the exact purpose of their visits.
It seems to me that one way out of the problem would be for those who have reason to visit this country regularly to have that acknowledged in their travel document by an unlimited access stamp. I freely admit that I have followed the American example in this. In exchanges with my hon. Friend the Minister, who was kind enough to write to me after Second Reading, a certain amount of misunderstanding seems to have crept in. I may have contributed to that by using the word "visa". The present BDTC passport allows unlimited access. I merely suggest putting a stamp into that passport or its successor passport. That is not a visa system, because the process is voluntary. There has been careful consideration of words in many speeches today, so perhaps I should refer to a "multiple access stamp" and thus avoid any suggestion of a move away from existing rights, which is not my purpose at all.
I hope that my hon. Friend the Minister will also tell us whether in the light of the latest advice from Hong Kong, following the debate there, there is to be an absolutely straightforward transfer as between BDTC and BNO passport holders on the right of access though not the right of residence. The comments that have come out of the message to Mr. Colvin Haye in the recent debate in Hong Kong seems to throw some doubt on that. I think that the only clarification given related to entry certificates. On the assumption that the current BDTC privileges in terms of United Kingdom entry would be transferred to the BNO passport, the procedure that I suggest would apply equally to the latter.
The problem that I have described has wider implications. The hon. Member for Hamilton referred to the acceptance of Hong Kong citizens' rights by third countries. There is an interesting difference in the figures that I gave earlier as between British citizen passports and BDTC passports. Some 104 countries allow entry on the

basis of a British citizen passport with visa and 70 allow entry without visa for BDTC Hong Kong passport holders. In other words, some 34 countries will accept a British citizen passport but not a BDTC passport without a visa. Those countries include Austria, Brazil, Denmark, West Germany, Japan, Bermuda, Spain and Sweden. Therefore if my suggestion were to become part of the standard practice, I would expect the Government to seek reciprocity, certainly from other members of the European Community and from the Commonwealth. The people about whom I am especially concerned are involved in international trade, investment and the public service. They are important to the relationship between Hong Kong and the United Kingdom and to the wider relationship implied in the list of countries that I gave.
We may not have addressed our minds to the question of what is to happen about British visitors to Hong Kong, especially those who go in pursuit of trade, industry and the international relationship implicit in the agreement, as 1997 draws nearer. Our difficulty at present is that we have old-fashioned thoughts about the way trade has been done between the United Kingdom, Hong Kong and China. We should take the view that whenever we are concerned with Hong Kong we are also concerned with China.
We have a great opportunity to see the growth of investment in Hong Kong and to recognise that it is a longterm investment in China. I was glad to see that the Governor made that point in a speech to the stock exchange. Some people in the People's Republic of China will look for direct investment in China, but prudent business men, industrialists and those who already have a stake in Hong Kong would do well to consider the opportunity to create a centre of excellence in Hong Kong, which could relate, particularly to the special economic zones, as a natural bridge to the whole of China as its market.
The way to facilitate that process is to ensure the freedom of travel from Hong Kong to the United Kingdom and vice versa, and by extension into China. In other words visa liberalisation would allow wider access to China as a whole.
Those are some of the reasons why I urge my amendment on my hon. Friend the Minister. I hope that it provides him with a way through some of the practical difficulties. I have received support from members of UMELCO and members of the Hong Kong Government for my amendment. In talks about the issue it has become clear that the two classes of citizens—the BCCs and BDTCs — should be tackled in the short term. My proposal would help in that process.
After 1997, a whole new range of relationships will evolve. I hope that my suggestion will facilitate the building of bridges, and the strengthening of links and of a tripartite agreement, to which the Committee has shown its commitment tonight. I hope that my hon. Friend the Minister will see that the objections he put to me in correspondence were based on a misunderstanding about the rigidity of the visa system. My suggestion is flexible and, I hope, practical.
I recognise that the wording of my amendment would not fit into the terms of the Bill. My hon. Friend may be relieved to hear that I shall not, therefore, seek permission for a separate vote and to divide the Committee. I hope that my hon. Friend the Minister will respond in that spirit of good will and co-operation. I appreciate that, having heard the arguments in the light of current events, he may wish


to give the matter further consideration. I reserve the right to come back on Report, because I believe this to be an important matter.

Mr. Alfred Dubs: Unlike many hon. Members who have spoken in the debate, I have not had the opportunity to visit Hong Kong. However, having spent many weeks and months in the Standing Committee on the British Nationality Act 1981, may I claim some familiarity with Hong Kong born of those long hours of debate?
I am not sure that I followed the argument of the hon. Member for Arundel (Mr. Marshall) correctly. He seemed to be implying that British dependent territory citizens have certain rights of entry into the United Kingdom, and that he wanted those rights to be retained when the measures about which we are talking come into force. My understanding is that, in the main, British dependent territory citizens do not have the automatic right of entry into this country. We established that during the passage of the British Nationality Act. Therefore, I had some difficulty following his argument, based as it is on an incorrect premise.
When I re-examined some of our debates on the British Nationality Act, I wondered whether some of the discussions that we are having now were not foreseen—

Mr. J. Enoch Powell: Yes.

Mr. Dubs: —yet we seemed to ignore some facts that stared us in the face at that time. Shortly after that Bill becoming law we are forced to change some of its provisions, although we were assured at the time that the Government—the same Minister is sitting on the Front Bench now—had thought through the matters and were ertain that they were anticipating future developments in Hong Kong when they provided for the future citizenship of those in Hong Kong. If hon. Members doubt what I say, they should re-read those Committee debates.
My special concern is with amendments Nos. 1 and 2, and with paragraph 2 of the schedule. I share the views expressed by other right hon. and hon. Members this evening that a matter of such importance as the nationality provisions affecting one territory should not be dealt with by Order in Council. Referring again to our debates on the British Nationality Act, in Committee and on the Floor of the House, the way in which the House dealt in detail with those provisions, and the way in which we were able to develop the arguments, I am even more concerned that the Government believe that Hong Kong will not have the benefit of those procedures. I must admit that we came up with the wrong answer for Hong Kong in the debates on the British Nationality Act—

Mr. J. Enoch Powell: It was not our fault.

Mr. Dubs: I should say that the Government came up with the wrong answer, because we must change the provisions now. But as the right hon. Member for South Down (Mr. Powell) said, that was not our fault. Many of those points were put to the Government during the Committee stage of that Act.
I shall not address any of my remarks to the ethnic Chinese, because I wish to keep my speech short. They are catered for, or at least there are not too many ambiguities about their position. I am concerned about other people

now in Hong Kong who are not protected in the same way. Some of these problems were referred to on Second Reading and earlier today. First and foremost, I am still not happy about what the Government think will happen to the 6,000 people of Indian descent. At the moment, they are British dependent territory citizens. They will become British nationals overseas under the Government's proposals, if amendment No. 2 is passed. However, any children born to those people after 1997 will, I assume, become British overseas citizens.
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Although the intention of British overseas citizenship in the Nationality Act is that that status should not be hereditary, I interpret what the Government have said to mean that this group of people will, exceptionally, have a citizenship that can be passed on from generation to generation. The Minister suggested that on Second Reading. He said:
It is our intention that no British national or any child born on or after 1 July 1997 to a British national should be made stateless as a result of the nationality arrangements, envisaged in the Bill.
He went on to say, when talking about British dependent territory citizens, that the "title announced today"—the transfer from BDTCs to British national overseas—
does not give a right of abode here. It preserves all but one of the entitlements possessed by those who are at present BDTCs. The one exception is right of transmissibility." — [Official Report, 21 January 1985; Vol. 71, c. 809–10.]
British nationals overseas do not have the right of transmissibility, and their children will therefore become British overseas citizens, who will, by implication, have transmissibility, although that was never the intention of the Nationality Act. If I have not got that argument right, I hope that the Minister will clarify the point, but, having studied what he said on Second Reading, I cannot come to any other conclusion. If it were possible to come to any other conclusion, the Minister's undertaking that nobody would remain stateless would not be capable of fulfilment.
I am concerned that we are getting ourselves into somewhat of a tangle, and, as my hon. Friend the Member for St. Helens, South (Mr. Bermingham) said earlier, we are in danger of putting a group of people into similar difficulties as those experienced by the east African Asians. They are still queuing up in Gujarat province in India and waiting six or seven years to come here and establish a right that has been given to them by successive British Governments, but is being handed out in meagre annual doses.
The right hon. Member for South Down anticipated that, and said that the new type of citizenship should not be given, and instead travel documents should be issued. I take the opposite view, that we have a responsibility to see that we do not leave any people high and dry, and stranded with no territory to which they belong, and no place to which they can travel. It is by no means certain that there will be a continuation of rights in Hong Kong when the status of Hong Kong is changed.

Mr. Michael Marshall: I am reverting to an earlier point made by the hon. Gentleman. I was trying to refresh my memory from the notes provided by the Hong Kong Government Office. The hon. Gentleman asked about British dependent territory passports, and I was looking to see what had been said in the debate in Hong Kong in the past few days. I see that no commitment is made as to when that passport will be superseded by the British


national overseas passport. I understand, therefore, that this passport must continue for some indefinite period, and perhaps we shall hear a view on this tonight. While the passport or other travel documents continue, the question of access to this country still remains as previously arranged. My understanding of that is that a stay of between one month and one year is available to BDTC passport holders. For that reason, I am suggesting that a stamp that could go into such a document and could subsequently be transferred into any document that is issued within the SAR after 1997.

Mr. Dubs: No doubt the Minister can answer for himself in explaining the point. My argument was not that BDTC passport holders would lose their passports at a later date but that their children born after the due date in 1997 would become British nationals overseas. There were then difficulties. As to the hon. Gentleman's other point, I am sure that the Minister can answer that himself. My understanding is that at the moment, BDTCs do not have an automatic right of entry into this country. They may be allowed to enter this country for periods ranging from one month to one or two years, but they have to establish that right by seeking to obtain an entry certificate or by being allowed in. But that is by no means automatic. They may well be refused entry when they reach Heathrow.

Mr. Michael Marshall: It may be that the words that are used need to be defined. Entry equals access. It does not mean residence. I understand that there is no difficulty about those with British dependent territories citizenship visiting this country on existing passports, but their entry is for the purpose of making a visit, not for residence.

Mr. Dubs: I have to disagree with the hon. Member for Arundel. It may be that in practice the majority of BDTCs have no difficulty in obtaining entry to this country for the purpose of making a visit. Permanent settlement is not the question, but the fact is that they still do not have an automatic right, any more than do people from most other parts of the world. Therefore they have to be allowed in; they are not entitled to come in. In seeking to ensure that the existing rights of those people are not lost in their change of citizenship the hon. Member is saying that their very limited rights, which do not guarantee entry, should be transferred. I did not really follow the hon. Member's argument, even if I concede that in practice these people do not have too much difficulty in coming in as visitors. That is not the case with people from many other parts of the world, although this is not the occasion to develop that point.
My concern is that we shall leave certain people without the basic rights to which they are entitled. Ought we not to consider allowing those people who wish to become British citizens and who have no other citizenship to become British citizens after a certain date? If they wanted to avail themselves of it, this small group of people would be able to come to this country and exercise the right that I would wish them to enjoy. The alternative is to leave them with no obvious place to which they belong. If they have no citizenship they will be, in effect, stateless.
The other group of people about whom I am concerned are the Vietnamese refugees and any other people who do not come into the categories that we have discussed. I am not clear about the future position of the Vietnamese refugees. They are not ethnic Chinese; they are not BDTCs; and they have no means of becoming BNOs or

BOCs. In other words, they will remain stateless. The Minister referred to other groups who, apart from the Vietnamese, are in this position. I should be unhappy if we passed legislation that left a group of people in a territory for which we are still responsible suspended in mid-air, with no citizenship, no rights and no guarantees about their future. I am not saying that every Vietnamese refugee in Hong Kong is directly our responsibility and ought to be allowed to come to this country. However, we ought not to ignore the fact that these refugees exist. We must not just hope that they wil not make a fuss when we pass legislation and that the Chinese will take care of them. That is not good enough. If there is no other alternative, I believe that we have to accept responsibility for these people and possibly share it with other countries. Therefore, I am unhappy about what is intended for the two groups of people I have mentioned. The Government owe us a responsibility, and we owe them a responsibility to say what their long-term intentions are. I have said what my solution would be, and I should like to hear the Government's view.

Mr. Adley: I join the hon. Member for Hamilton (Mr. Robertson) in apologising to you, Sir Paul, for inaccurately designating you. I should like to take this belated opportunity to congratulate you on your merited and well-deserved knighthood. We all share in your pleasure.
I am happy to speak after the hon. Member for Battersea (Mr. Dubs), who has never been to Hong Kong. I think that I first went there in 1955. But I have one thing in common with him, and that is that, like him, I have never travelled to Hong Kong with the benefit of a free ticket from the Government of Hong Kong. Many hon. Members will well understand the reasons for that.
In the past two weeks we have had a further chance to consider the Bill. That rightly enabled the people in Hong Kong to express their views and gave some of us a further chance to consider the point that my right hon. and learned Friend the Foreign Secretary announced on Second Reading about the designation of British National (Overseas) citizenship. I am slightly concerned that the Indian community in Hong Kong, and particularly those of its members who settled there before India achieved independence, will find that their new status is less advantageous than their BDT citizenship, for the very reasons that were outlined by the right hon. Member for South Down (Mr. Powell). I did not necessarily agree with everything that the right hon. Gentleman said, and we may not draw the same conclusion, but it is important to discuss such matters openly and frankly.
There are three things that we should avoid at this stage. First, we should avoid misleading people, deliberately or otherwise. Secondly, we should avoid making promises that we cannot deliver. Thirdly, we should avoid upsetting the delicate balance of the relationship between the British and Chinese Governments, and between both of those Governments and the people of Hong Kong. I am quite clear about what we should and should not be doing in respect of the first two items, but in respect of the third, one must bear in mind that nothing is quite as simple or as black and white as the right hon. Member for South Down might have us believe.

Mr. Bermingham: Does the hon. Gentleman agree that we are discussing the future of several million people


who live thousands of miles away, and that they have a right to expect that whatever we legislate about will not deprive them of security in the future? At present we are putting a number of people in Hong Kong, who are not ethnic Chinese, in a position in which they may well find themselves stateless.

Mr. Adley: The House of Commons is not in a position to give any guarantees to anyone in Hong Kong about their indefinite welfare. To seek to pretend that we can legislate indefinitely for their perpetual welfare falls fairly and squarely under the heading of making promises that we cannot deliver. I take the point about the minority Indian population, who are in a special situation. I think that my right hon. Friend the Minister nodded earlier that the Government are seized of it and intend to do something about it. But it is wrong to give perhaps 99 per cent. of the population of Hong Kong—the Chinese citizens—the impression that, merely by passing legislation here, we can provide them with permanent guarantees about their settled future. That is to make promises that we cannot deliver. I stress again that the people of Hong Kong are dependent on good relations between the British and Chinese Governments, and ultimately on the intentions of the Government of the People's Republic of China.
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In a book that I wrote on the subject, I recalled stating on 8 September 1982:
The future status of Hong Kong depends ultimately on Beijing.
Let us accept, as we debate this issue, that we can only do our best within the limitations of the power that we shall have in the future. The right hon. Member for South Down (Mr. Powell) was right to point out that we should be failing in our duty if, by this legislation, we misled people into believing that they were being given something entitling them to what we know we are not able to deliver.
The right hon. Member for South Down used the word "fraud" and implied that there was a plot between the Foreign Office, the Chinese Government and the Government of Hong Kong. In fact, the pressure to dot the i's and cross the t's has come not from the British or Chinese Governments but from certain people in Hong Kong, for understandable motives, and that pressure has been led by UMELCO in Hong Kong.
All along we have been urged to provide security and guarantees. We cannot provide such guarantees, and that is why the right hon. Gentleman said that we were in danger of perpetrating a fraud on those people by this legislation. I emphasise that neither the British Government nor the Chinese Government have been behind the move to seek such guarantees, and even at this late stage the British Government are being pressed to make changes to the Bill.
The hon. Member for Hamilton (Mr. Robertson) referred to the press in Hong Kong criticising us for showing a lack of interest in their affairs. They always know best. On 4 November 1983, the South China Morning Post, referring to a visit that I was about to make, wrote:
Hopefully, his forthcoming visit to Hong Kong will impress on him the grave disquiet felt by people in many walks of life here about outsiders interfering in Hong Kong's affairs as negotiations on the future issue continue. Although Mr. Adley

has a mandate to speak for the electors of Christchurch and Lymington he holds no such mandate for the people of Hong Kong.
Leaving aside his poor homework in designating my constituency wrongly, I wonder who the deputy editor of the paper, who wrote that, thought was going to settle the future of Hong Kong. That is the task of hon. Members here, and I agree with the hon. Member for Hamilton that we have done our best, within the limitations of the power available to us, to attend to their problems.

Dr. Marek: It will not do to say that we have done our best and can wash our hands of the matter. There is an onus on us to ensure that nobody will be stateless as a result of what will occur in 1997. Although we may not be able to give guarantees here and now, let us hope that in the coming 12 or 13 years we will be able to ensure that nobody is stateless.

Mr. Adley: I agree with the hon. Gentleman, but we cannot, in legislation tonight, give people guarantees. Certainly we must do what we can. As for people being stateless, presumably the hon. Gentleman was referring to that tiny fraction of people who are not of Chinese race. The hon. Gentleman must do me the credit of recognising that I raised this point on Second Reading and have done so again during this debate. I have made clear beyond peradventure my belief that we have a responsibility for these people, perhaps more than others. It is not practical or sensible to try to write into the Bill precisely how we shall do that. It is better to get these provisions right in the next six or 12 months or two or five years rather than try to identify in this legislation every problem.
It might have been better if we had had two Bills—one dealing specifically and solely with the sovereignty issue, and the other dealing with all the problems of nationality and citizenship.

Mr. Faulds: If the Government do not get this matter right within the next seven or nine months, or whatever, what recourse does the House of Commons have under the Order in Council procedure to put it right?

Mr. Adley: In June I shall have been a Member for 15 years. I cannot recall the House being incapable of doing what it needed to do if that was the will of the House and there was a majority to achieve that objective. I have great faith in the collective determination of hon. Members to act in a particular way if they wish to do so. I see that the right hon. Member for South Down is looking askance at that statement. He is probably thinking of the European Communities Act 1972. Whether hon. Members have the will to undo what we did at that time is a matter for debate—but not tonight.
I respect the right of the right hon. Member for South Down to make the point that he made and I agree with him that it would be improper for us to make promises that we cannot maintain. The right hon. Gentleman did not answer my question whether he believed that it was right for the British Government to evolve a form of status for the Chinese citizens of Hong Kong which applied to their movements when they were travelling outside Hong Kong but did not affect their position in so far as they might wish to come to the United Kingdom. I do not propose to pursue him on that point now.
Membership of GATT is one of the most important considerations for Hong Kong. That issue and others will depend upon finding some form of identity which makes


Hong Kong a separate entity to the People's Republic of China in the eyes and minds of those countries with which Hong Kong will be negotiating to maintain its present commercial status. For that reason, if for no other, I believe that flexibility is the sensible order of the day. That is why I have been concerned about the persistent attempts to try to find detailed answers at one pop to problems that, are only just beginning to emerge.
I finish with these words. I believe that the flexibility I seek will prove to be the test of the sincerity of the Government of the People's Republic of China in their oft-stated intentions, now that sovereignty has been ceded, to maintain the stability and prosperity of Hong Kong.
I conclude by agreeing with the hon. Members for St. Helens, South (Mr. Bermingham) and for Wrexham (Dr. Marek) that we must be certain that we receive from the Government a firm and clear undertaking that we shall maintain for those members of non-Chinese minorities in Hong Kong our absolute obligation to find a solution to their problem long before 1997, even if we cannot write that provision into this legislation immediately.
Finally—

Mr. Russell Johnston: The third "finally".

Mr. Adley: That may well have been my third "finally". It will be the last. The success of this legislation will lie not in producing a bolt-hole in the United Kingdom for the people of Hong Kong but in maintaining the stability and prosperity of Hong Kong and maintaining for the Hong Kong people their ability to live in the present form of society in Hong Kong. Let us never lose sight of that aim.

Mr. Bermingham: I wish to draw to the attention of the Committee the fact that, although I have never been to Hong Kong, I have, as a practising lawyer for 15 to 20 years, been dealing with immigration problems. I view with horror any legislation that will again create some of the misery that I have seen in those cases. I feel that I have a duty to point out the legal problems that I see.
I have spent some considerable time studying the subject of the refugees. I am sad at having to take issue with my hon. Friend the Member for Hamilton (Mr. Robertson), but I do not believe that anything good can be said about the closed and open camps in Hong Kong. One solution to the problem would be for the Hong Kong Government to allow the ethnic Chinese in the camps to assimilate into the community in Hong Kong. That would start to breach the logjam that has developed in those camps. I do not propose to develop that issue any further at this stage.

Mr. George Robertson: I remind my hon. Friend that when I referred to the Vietnamese refugees, I paid tribute to the work that the Hong Kong Government had done in resettling almost 100,000 of the Vietnamese boat people. The fact that people are held in closed camps and the circumstances in which they are kept continues to cause anxiety to the Hong Kong Government, and to Members of the House. We long to find a solution which will remove people from those quasi-prison camps.

Mr. Bermingham: I am grateful to my hon. Friend for intervening and correcting the record in so far as I may have misheard him. He takes the stance that I do. I have given my views here and elsewhere, and I shall continue



to do so until the problem is solved because it is one that we must solve. I do not propose to continue with that point because it is outside the scope of the amendments.
I did not participate in the Second Reading debate, but I have studied the record carefully. I appreciate that nuances can occasionally be read into the written word and I looked for the assurances given to what we might call the "ethnic minority groups" who might find themselves in a difficult position if the legislation is left as it is.
I ask the hon. Member for Christchurch (Mr. Adley) to accept that my intervention in his speech was born out of the frustration of finding no commitment to the solution to the problem. I should not dream to seek to argue with him or any author about their books, but perhaps we could approach the matter in a way which does not leave us talking about BOCs, BNOs and BDTCss. They mean nothing to the man in the street. He wants to know whether he will have a secure status somewhere and somewhere he knows that he can go.
The solution is not beyond the wit of man. For instance, in 1982 we gave the Falkland islanders British citizenship, and under the British Nationality Act 1981 we allowed Gibraltarians to register in the United Kingdom as British citizens. I understand that some 5,000 did so in 1983 and 1984. When we talk about the minority groups in Hong Kong we are talking about relatively small numbers of people. We are not talking about numbers that will compare with the South Africans. As I understand the legislation, nearly 1 million South Africans have the right to come to the United Kingdom as British citizens if and when the majority take control of the state, as will undoubtedly happen one day. In those circumstances, up to 1 million South Africans have the right to come to the United Kingdom, and there is nothing that we can do about it. It is in legislation already.
If we can solve those problems and put forward such solutions, it is not beyond the wit of Parliament to put forward a solution in the years ahead before 1997 that will protect the rights of the Indians and other small minority groups who are not protected just now. There is no way that we can dodge that issue. Those people are not protected.
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At this stage, I do not expect the Government to say, "We shall do 1, 2, 3 or 4." However, I ask for a clear and unequivocal statement in the House in respect of citizens of Hong Kong who are not ethnic Chinese, who could find themselves in much the same situation as the Asians in east Africa in the late 1960s. That was an appalling situation, which all of us recognise. Those persons should be told in simple terms that before 1997 we shall arrive at a solution that will create for them a citizenship and a right of abode in the United Kingdom in the event of their "security of tenure"—so to speak—in Hong Kong being jeopardised.
In saying that, I in no way seek to criticise the Peking authorities. I appreciate that times will change between now and 1997. It would be a fool who did not appreciate that. At the moment Peking says, "Fine, everybody in Hong Kong can stay and we welcome them." However, conditions may arise in which those who are non-ethnic Chinese find that they wish to move. The security of knowing that one can go is in itself a deterrent to go. It has been found in the past that where people feel secure and welcome at home, they tend to stay.
The numbers involved are not great. I merely ask the Government to put down a marker, a clear undertaking that steps will be taken to protect those people's interests. I do not like the form of the Bill, in that it provides for those matters to be dealt with by Order in Council. That is not entirely satisfactory. However, I am prepared not to divide the House on the issue. I put the marker on the road for the future that if in the next couple of years clear provisions are not made, I, and I am sure many hon. Members, will seek to bring the matter back before the House.
I should like to mention just one other small point. There has been talk about people who may want to leave Hong Kong because of the nature of their job, which makes them feel that in the transfer of sovereignty they would rather go away. It might be because they have been customs officers in Crown service, and so on. I know that there are provisions for their protection, but I ask the Government to take this point on board, which has been raised with me by people from Hong Kong. I refer to people in sensitive jobs. If we are to have secure government between now and 1997, those who have to carry out sensitive functions, whether they are ethnic Chinese police officers or customs officials, must have the security of knowing that if they wish to come to the United Kingdom in 1997, provision will be made for them and their families to be taken care of.
I see that the Minister nods in acknowledgement of the problem. I concede that it has been raised in the past, but we have a duty to those whom we shall ask to serve us until 1997. They should know that, in the sensitive areas in which they serve, they have added security that will enable them to carry out their functions free from the pressures that would otherwise be upon them. If we are to have good governance in Hong Kong in those years—I am sure that we shall — we must give such security to those whom we ask to serve us.

Mr. Luce: There has been considerable debate for an hour and a half on a series of amendments that are important both to the Committee and the people of Hong Kong.
Let me set the scene with Government amendment No. 2 before I deal with amendment No. 1. The purpose of amendment No. 2 is to incorporate in the Bill the title of the proposed new form of nationality. As my right hon. and learned Friend the Foreign Secretary announced on Second Reading, this will be, as we all now know, "British National (Overseas)".
I am glad that we have been able to propose the amendment at this stage. We were pressed to do so by a number of hon. Members on Second Reading.
The people of Hong Kong have now had an opportunity to express their opinions on the title, and I am glad to be able to report that it seems to be generally acceptable in the territory.
It was not easy to devise a title that meets all the necessary requirements. On the one hand, it needs to make clear that we are dealing with a form of British nationality. That was the strongest desire of the people of Hong Kong. On the other hand, it is essential that the title can be used after 1997, and, therefore, that it carries no implication of

a continuing constitutional relationship between Britain and Hong Kong after 1997. The title "British National (Overseas)" meets both those criteria.
The benefits of the new status will be set out in the Order in Council and will be subject to parliamentary approval, but the Government's intention is that the new form of nationality will carry broadly the same benefits as British dependent territory citizen except that it will not be transmissible by descent. Holders of the new status will be able to use British passports. They will be eligible for British consular protection in third countries. They will have a right to registration as British citizens under section 4 of the British Nationality Act 1981 on the same terms as the British dependent territory citizen. The detailed provisions will be set out in the Order in Council to be set before the House when they can be discussed in greater detail.
The Committee will be only too aware that the title used to describe the status is itself the subject of great sensitivity in Hong Kong and the title now proposed has the endorsement of the Hong Kong Executive Council. As I have said it seems to have been generally well received by the public in Hong Kong. To put it in the Bill now will help to calm some of the anxiety on that score in Hong Kong. I hope that the Committee will be able to agree to the amendment. As it is a matter of importance to the people of Hong Kong, the amendment will be a reassurance to them.
Putting aside the fantasy world of the right hon. Member for South Down (Mr. Powell) of plots, deceptions and frauds, let me get down to the reality of the other amendments. The effect of amendment No. 1, as the right hon. Gentleman says, would be to remove the nationality provisions from the schedule to the Bill in their entirety. The Government firmly believe that paragraph 2 should remain in the schedule to the Bill. The measures concerned arise directly out of the agreement and the United Kingdom memorandum. They are part of the same package. It is, therefore, appropriate that all such matters should be dealt with in the Bill. In fact, I would go further and say that silence on nationality would cause great uncertainty in Hong Kong and might cast doubt on the Government's willingness to implement the provisions in the United Kingdom memorandum.
Since it was made clear that nationality questions were among the primary concerns of the people of Hong Kong, the Government consider that that would be damaging. In this enabling clause we are endeavouring to provide a clear framework and statement of intent with regard to nationality and to deal with what one hon. Member described as a unique situation. Of course, the details will follow in the form of the order, which on Second Reading my right hon. and learned Friend announced to the House we would undertake to introduce within a year of the passage of this legislation.
In the debate today, several hon. Members have made it clear, as they did on Second Reading, that they were not satisfied that there would be sufficient opportunity to discuss the draft Order in Council in detail under positive resolution procedures.
I acknowledge that the right hon. Member for South Down is saying that he believes that these matters should be dealt with by means of primary legislation. Other hon. Members support the right hon. Gentleman. I acknowledge that point of view but I have sought to explain why we believe that it is necessary to deal with the problem in


the way that we propose. The Order in Council procedure is inevitable because of the timing constraints on the Bill, which I have explained to the Committee.
The Government have moved as far as they can to meet the wishes of the House of Commons. We agree that the House must be given the opportunity to have a preliminary debate on the draft order. In other words, it will be, as some hon. Members have described, an order with green edges. According to the way in which the debate goes, the Government will, if necessary, withdraw the draft order and revise it before laying it again before the House for debate in the normal way under the affirmative resolution procedure. It will be open to the House to express its views without having to oppose or reject the order as a whole. I hope that the House will find that procedure to be of help in enabling its views to he taken fully into account before the draft order is finally submitted for affirmative resolution.
The right hon. Member for Down South anticipated how the Government's mind is working—this is not a plot, fraud or deception—and I know that he will not be satisfied with the procedure that I have outlined. He has made it clear that he will continue to press for a separate Bill. However, for the reasons which I have advanced, I do not share his views on this issue. The creation of a new form of British nationality for those who must lose BDTC in 1997 was essential to securing the acceptability of the agreement in Hong Kong.
Amendment No. 3 seeks to insert "status" in the schedule instead of
new form of British nationality".
I have already said that the Government are committed to granting a form of British nationality to persons who are BDTCs by virtue of a connection with Hong Kong. I hope that this commitment will enjoy the support of the Committee. It was made clear at the time of the assessment exercise in Hong Kong and at the time of the debate on the agreement in this place that the "appropriate status" referred to in the United Kingdom memorandum would be a form of British nationality. It was on this basis that the people of Hong Kong and the House endorsed the agreement. If we failed to specify that in the order it would cause great dismay and lead to the belief that we were not keeping our word.
Amendment No. 5 is directed to the introduction of travel documents and I urge the Committee not to accept it. Paragraph 2 of the schedule does not cover the provisions in the United Kingdom memorandum relating to the issue of passports. These provisions will be implemented under the Royal Prerogative in the usual way. The United Kingdom memorandum makes the Government's intention absolutely clear. Persons who are BDTCs by virtue of a connection with Hong King will be eligible to acquire a status which will enable them to use passports issued by the Government. United Kingdom consular officials will be able to renew and replace these passports after 1 July 1997. The intention of the right hon. Member for Down South is presumably to deny former BDTCs the right to hold British passports after 1997. Their eligibility to hold passports was part of the package that was found acceptable by the people of Hong Kong and the House. I must urge the Committee to reject the amendment.

Mr. J. Enoch Powell: Will the Minister make it clear what the people of Hong Kong were told was the advantage to them of having a British passport over having a British travel document?

Mr. Luce: The deep anxiety of the people of Hong Kong, especially the 3 million who are BDTCs, is that they should retain some form of British nationality allied to a British passport, which would provide them, on the responsibility of the British Government, with, for example, consular protection in third countries. The matter has caused great concern in Hong Kong and we thought it right to satisfy that concern.
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In amendment No. 4, my hon. Friend the Member for Arundel (Mr. Marshall) asks questions that are geared to facilitate for entry to Britain. I appreciate that my hon. Friend has the best interests of the people of Hong Kong in mind. Since Second Reading, we have had correspondence, and I shall think carefully about the additional comments that he made today, to which it would not be possible for me to give a detailed and clear reply until I have considered them. I do not believe that amendment No. 4 would facilitate travel by Hong Kong BDTCs, which is clearly his intention. There is no requirement for BDTCs to have visas, as opposed to entry certificates, for entry to the United Kingdom. I do not think that it would be appropriate, or well received in Hong Kong, to introduce such a requirement, even on an optional basis.
There is a system by which Hong Kong BDTCs may obtain entry certificates, as opposed to visas, before travelling to the United Kingdom. These are not required for ordinary visits of less than six months, although they may be obtained if the traveller wishes. In addition, BDTCs who are bona fide frequent travellers may already obtain entry certificates that are valid for two years and allow multiple entry to the United Kingdom. I believe that this practice already substantially meets the requirement suggested by my hon. Friend.
On the wider point of the international recognition of British National (Overseas) passports, I can assure my hon. Friend that the Government will do all that they can to ensure the same access to other countries as that enjoyed at present by BDTC passport holders. We intend to negotiate visa abolition agreements.

Mr. Michael Marshall: I am grateful to my hon. Friend, as what he has said is helpful. I confess that I had not appreciated the significance of the entry certificate for two years. Could that entry certificate be shown in a travel document and be carried over after 1997? If such a transfer of documentation were possible, that would go some way to meet the bridging process that was behind my amendment.

Mr. Luce: If I may, I shall respond to my hon. Friend as soon as I have had time to consider the matter.
I should not do justice to the Committee if I did not pick up some of the other important issues that have been raised, such as statelessness and other matters relating to passports. I was asked whether the British national (overseas) passports will state the right of abode in Hong Kong. A statement to that effect wil be entered by the Government with respect to the period before 1997, as laid down in s ection XIV of annex 1 to the joint declaration.


After 1997, we shall be able to state that the holder of the passport holds a permanent SAR identity card which is evidence of his right of abode in the SAR. The Government will discuss with the Chinese authorities the wording of a statement to be included in the BN(O) passport. The aim is to ensure that an individual need use his passport—and not have to supply an identity card—only to satisfy immigration officials in third countries that he has the right of abode in Hong Kong.
The Government have undertaken to make every effort to explain arrangements to Third countries, as I have said. This will be done between the enactment of the Order in Council and the issue of BN(O) passports. Given a clear indication of the right of abode, I se no reason for third countries to introduce new restrictions on entry of BN(O) passport holders.
I deal next with statelessness. It is only right that the hon. Members for Battersea (Mr. Dubs) and for St. Helens, South (Mr. Bermingham) and, indeed, my hon. Friend the Member for Christchurch (Mr. Adley) brought this up. I should therefore restate the position and clarify it. The hon. Member for Battersea raised an additional question that I should answer.
The Government have clearly stated their intention in this area. It is our intention that no former Hong Kong BDTC, nor any child born on or after 1 July 1997 to such a person, should be made stateless as a result of the arrangements envisaged in the Bill. All former Hong Kong BDTCs will be able to acquire BN(O) status if they wish before 1 July 1997. If they do this, they will retain that status for the rest of their lives. Any BDTCs who do not acquire BN(O) status and would otherwise be stateless — for example, if they are not Chinese nationals and hold no other nationality—will become British overseas citizens on 1 July 1997. The children born on or after 1 July 1997 to former Hong Kong BDTCs who are Chinese nationals will, of course, have Chinese nationality. Children born to non-Chinese former BDTCs will acquire British overseas citizen status at birth if they would otherwise be stateless.
Here I answer the question of the hon. Member for Battersea. The proposal that children born after 30 June 1997 to non-Chinese former BDTCs should acquire BOC status automatically at birth if they would otherwise be stateless is intended to apply to the first post-1997 generation. However, we appreciate that there may be concern about potential statelessness arising among subsequent generations of non-Chinese Hong Kongers. It would not be appropriate as a general principle to grant British nationality indefinitely and without restrictions to the descendants of British nationals. However, problems of further generations and potential statelessness—and we are looking here into the next century—are being urgently examined in response to representations made by the non-Chinese community in Hong Kong. In this category we include some 5,000 Indian citizens.
I therefore hope that what I have said answers the position as the Government see it. I reaffirm the position of non-Chinese BDTCs resident abroad which I outlined on Second Reading. Residence outside Hong Kong is not a bar to the acquisition of the new British national (overseas) status. Thus non-Chinese persons who are

BDTCs by virtue of a connection with Hong Kong will be eligible to apply for the new status whether or not they are currently resident in Hong Kong.

Mr. Adley: My hon. Friend referred to "Indian citizens". However, the people who have lived in Hong Kong of Indian descent, and who were never citizens of India before they moved to Hong Kong, because it was not an independent country, are in a separate category. From what my hon. Friend said, it seems to me that these people of Indian race in Hong Kong who are being offered British overseas citizenship will be at a distinct disadvantage as against the overwhelming majority of the Chinese citizens of Hong Kong, who have the option of a BOC passport or Chinese citizenship. Is it not fair that in due course we should make sure that these Indian people in Hong Kong have an alternative, namely, British citizenship, over and above the proposals that my hon. Friend has made?

Mr. Luce: If I referred to them as Indian citizens, I must correct that. I am talking about people of Indian origin who are part of the community in Hong Kong—all of whom, incidentally, will have the right of abode in Hong Kong. They come into the category of non-Chinese citizens on which I have given a fairly long answer. I do not think that it would be right or proper to grant them a right of abode and British citizenship. I have tried to explain how we propose to deal with the problem of non-Chinese citizens. In any event, there will be further opportunities to debate this. There will be a preliminary debate on the draft order when we shall be able to take the views of the House. I may also be able to say something further on that occasion which I hope will be helpful.

Mr. Faulds: I am grateful to the Minister for giving way and for the generosity of his assurances about Indian people living outside Hong Kong, but do those assurances cover the next generation?

Mr. Luce: I have explained the position very carefully. I ask the hon. Gentleman to read Hansard with care. Clearly there will be a problem with subsequent generations going well into the next century and we are considering that urgently. I would rather not add anything to what I have said at this stage.

Mr. Faulds: I appreciate the Minister's position and I do not wish to push him, but if he cannot give that assurance about the first generation after Hong Kong's subsumption by China what will be the position of those people? If they are refused British citizenship and abode, where will they be left?

Mr. Luce: I am sorry. I think that there is a misunderstanding. The people to whom the hon. Gentleman refers, if they have no other citizenship and would otherwise be stateless, will be British overseas citizens. I am sorry if I misunderstood the hon. Gentleman's question.

Mr. Faulds: I am grateful to the Minister.

Mr. Luce: The hon. Member for St. Helens, South referred to the admission to this country of people whom he described as "at risk". In certain very limited cases rights of admission will exist at the discretion of the Home Secretary, but this will be on a very limited basis for people who have been exposed to special factors and considerations. It would be inappropriate to disclose the categories and numbers of people involved or the special


considerations or factors concerned. I should add that that point has already been covered in previous statements and debates.

Mr. Bermingham: I am grateful to the Minister for that assurance. Perhaps I may press him just a little further. I do not expect him to go into details about the categories. I appreciate the reasons for not doing that. Will the Minister confirm that the right of admission will apply not just to those people but to their families and dependants surrounding them? One accepts that there are varying degrees of family, but I hope that this will be considered in the Chinese context rather than the narrow English context.

Mr. Luce: Our policy is that the assurances extend to spouses and dependent children under the age of 18, as we have stated on previous occasions.
I have tried to answer all the main points raised in relation to the amendments. I hope that the Committee will find Government amendment No. 2 acceptable but for the reasons that I have given I do not think that it would be right to accept the other amendments.
Amendment negatived.
Amendment made: No. 2, in page 2, line 17, leave out from 'acquire' to end of line 18 and insert
'a new form of British nationality the holders of which shall be known as British Nationals (Overseas)'.—[Mr. Luce.]
Question proposed, That the schedule, as amended, be the schedule to the Bill.

Dr. Marek: I tabled an amendment which replaced the word "may" with "shall", but it was not selected because in the House of Commons we are allowed not to instruct, but to ask Her Majesty to do things. The amendment sought to put strength into the argument that no one should be left stateless. This is not the time to consider constitutional questions. Although some people say that Orders in Council are archaic, they nevertheless allow the Government to do things that they could not do if they had to introduce legislation.
The arguments about statelessness were well put in the previous debate. I am satisfied with the Government's comments except for one matter that arose in reply to my hon. Friend the Member for St. Helens, South (Mr. Bermingham). I am not happy that the relatives of some people who may be allowed to come to this country would be limited to spouses and children up to the age of 18. We should perhaps reconsider that and allow wider discussion. These cases, by their very nature being special, could also involve other close relatives.
We should now wait to see what the order provides. When we have it in front of us, we can debate it, and then it can be laid before the House. The Committee can do no more at this stage, and I am happy with the schedule as it stands.

Mr. Bermingham: I ask the Minister to reconsider his answer to me regarding the children and the spouse, to which my hon. Friend the Member for Wrexham (Dr. Marek) referred. It worries me that a senior official in his middle years could be "at risk" and have a group of children with an age span from 10 to 25 years. I make this point because I acknowledge the sensitivity of the Minister's job.
It is important to accept that some people will be in that position, if we are to provide good Government up to

1997. We must seek to protect them. Does the Minister propose that we protect such an official and his children who are under 18 years of age, but leave behind his children who are over the age of 18? If so, we are inhumane, unseeing and unthinking. Everyone will retire promptly before their children reach the age of 18, and we shall not have the continuity of service that we need.
Will the Minister reconsider the family definition in a broader context than in the past? Realism and experience show me and, I hope, the Minister, that a family must be taken as a unit, and that one must not draw an arbitrary line. In cases of immigration, arbitrary lines have caused a great deal of sadness. we can avoid that on this occasion. We are not considering a large number of people. If the Minister will consider the matter in a broader context, we could save a great deal of trouble in the future.

Mr. Faulds: The comment, perhaps, ought to be made before we finish that the right hon. Member for South Down (Mr. Powell), as is his custom, issued some frightening prognostications tonight. He portrayed the preparation of a great plot between the Foreign Office, the People's Republic of China and the Government of Hong Kong. God help the Foreign Office. It normally does rather well, and I have the highest regard for it. However, that great plot was to pass a fraud on the people of Hong Kong and to fool them into thinking that their futures were safe when they were not. It ought to be known in those distant islands by the people whose future we are discussing that the right hon. Gentleman makes a practice of such frightening prognostications.

Mr. J. Enoch Powell: I make a practice of being right.

Mr. Faulds: Invariably, as the House will know, the right hon. Gentleman's forecasts prove utterly wrong.

Mr. Powell: When?

Mr. Faulds: On many occasions, for example, his forecast of the terrible dangers of immigration and rivers running with blood. They were all wrong. He will also be wrong about this. It is only fair to tell those people to sleep easy. The right hon. Gentleman is incorrect. The House, the Foreign Office and the people and Government of China are concerned about the future of the people of Hong Kong. They should be assured that, although we have the greatest regard for the right hon. Gentleman as a parliamentary performer, we know that he is given to these strange frenzies and fevers. They should be disregarded, because, of course, politically, he is a busted flush.
Question put and agreed to.
Schedule, as amended, agreed to.
Bill reported, with an amendment.
Motion made, and Question proposed, That the Bill be now read the Third time.

Mr. George Robertson: At this late hour, we have completed consideration of an important Bill. Our consideration has not been without event, because although the amendment to the Bill is important, the prophecies of the Chinese language newspapers were probably right yet again. However, the Government have made some concessions during our considerations, and it is wise to put our gratitude on record. The Government conceded more time between the Second Reading and


Committee stage. They agreed to have annual reports on the progress being made in the transition, and they have agreed to two debates on the Order in Council on British national overseas status. They have also included the name of that nationality in the Bill. They conceded that the Order in Council will have green edges. These are important concessions. The Government have listened to the will of the House and, in doing so, have done a great service to Parliament.
This Third Reading is not the end of the story. The book is not closing on Hong Kong, and there are 12 more years until the handing-over of sovereignty. The House must be conscious of its continuing obligations to monitor and to be vigilant about progress right up to 1997. On the evening of 30 June 1997, we shall make the transfer, and the House's direct influence will have gone. Until then, however, we shall not stop the scrutiny which, in the long transitional period, is imperative.

Mr. Johnston: It has been a privilege and a responsibility to have taken part in these debates on our acceptance, following negotiations, of the transfer back to China of the island of Hong Kong and its related territories. I include not just the land, but 5·25 million people—as many people as live in Scotland. It is a very different island that we hand back from the rocky pirates' base that we secured in the last century in circumstances in which we cannot take pride. It is also a very different China, though many traditions pulse unchecked through different political structures.
I said during our first debate, and repeated on Second Reading, that it is difficult for a Liberal to give an uncritical welcome to a Bill which surrenders sovereignty over a people without giving them an open, free choice. Nations, both large and small, continue, sadly, to be over insistent on their national pride and not sufficiently relaxed over the natural, individual and community urge to be independent that people have.
The enclaves that remain here and there across the globe are the leftovers of empires, and do not fit into tidy patterns, but why must we always have tidy patterns? Freedom and tolerance are more important than tidy patterns and historic rights. However, there is no doubt that the remarkable, indeed unique, agreement reached between the Government and the People's Republic of China can provide a framework which, while assuaging

Chinese national pride, can equally facilitate the continuing evolution of the vibrant, yet controlled, free enterprise community that is Hong Kong.
The formulation of the basic law will continue to be central to setting the ground rules and to establishing whether or not the agreement will work. I hope that it will. I believe that at this moment, every responsible person in China, Hong Kong and the United Kingdom believes that it will work. We all pray that we are right, and that Hong Kong will have the future that we all want for it.

Mr. Luce: I think that hon. Members will agree that we have had full discussions in Committee and on Second Reading, and I hope that this will be a source of great reassurance to the people of Hong Kong. We hope that the Bill will proceed to the other place, and that the House will continue to show strong support for it. I have tried to accommodate as much as I could the anxieties and views of the House. I believe that the people of Hong Kong have every right to be pleased to know that it has been the strong desire of the House, on both sides, to retain the closest possible interest in Hong Kong in the years up to 1997. That, too should be a source of reassurance.
It is partly for that reason that the British Government felt it right to make concessions on annual reports and due debate on the draft order, so that the accountability of the House is fully demonstrated. As the House knows, ratification of the agreement has to take place before 30 June 1997. Strong views have been expressed about Hong Kong and its future, which, like the hon. Member for Inverness, Nairn and Lochaber (Mr. Johnston) I believe should give a renewed sense of confidence. In the meantime, I repeat that Her Majesty's Government remain firmly responsible for Hong Kong until 1 July 1998. Against that background, I warmly commend the Bill to the House.
Question put and agreed to.
Bill accordingly read the Third time, and passed.

Orders of the Day — Statutory Instruments, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &amp;c.).

INTERNATIONAL IMMUNITIES AND PRIVILEGES

That the draft Specialized Agencies of the United Nations (Immunities and Privileges) (Amendment) Order 1985, which was laid before this House on 18th January, be approved.—[Mr. Durant.]
Question agreed to.

Orders of the Day — PETITION

Human Embryos

Rev. Martin Smyth: As one born and bred in the constituency of Belfast, West, I beg leave to present a petition signed by 13,906 constituents of Belfast, West. It is entitled "Petition for the Protection of the Human Embryo". Unfortunately in one way, perhaps thankfully in another, the constituents are represented by a person who has won a seat in this place that he will not take. Therefore, I am delighted that they have asked me to present this petition to the House.
The petitioners affirm their belief that the newly fertilised human embryo is a real, living individual human being. They oppose all practices that discriminate against the embryo and violate his or her human dignity and right to life. The petition continues:
Wherefore your petitioners pray that the House of Commons will take immediate steps to enact legislation which forbids any procedure that involves the purchase or sale of human embryos, the discarding of human embryos, their use as sources of transplant tissue or as subjects for research or experiment.
Your petitioners, as in duty bound, will ever pray.
To lie upon the table.

Orders of the Day — M1 (Driving Conditions)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Durant.]

Mr. Roy Galley: This Adjournment debate was sought because of increasing concern about driving conditions and standards on the M1 motorway. Recent accidents on the Ml, some in adverse weather conditions, have reinforced that concern. The problems to which I shall refer are undoubtedly experienced on other motorways throughout the country, but my familiarity and love-hate relationship with that road, having travelled up and down it between London and Yorkshire most weeks since June 1983, lead me to be specific about the M1.
Since I initially sought this Adjournment debate, the Select Committee on Transport has published its report on road safety. It covers in much more detail many issues of motorway safety and other related matters. I hope that at a later stage the House will have an opportunity to debate them in greater detail.
Observation during the last 18 months of travelling up and down the M1 suggests that traffic volume has increased and that driving standards have deteriorated. Coming southwards from Yorkshire, the difficulties become acute after the M69, the M6 and the M45 merge into the M1. At peak times—that phrase now seems to encompass most of the week except late at night and on Saturday afternoons—the stretch of the M1 from the Leicestershire-Northamptonshire border at least to the intersection with the M10 is, frankly, hell on earth.
There is an enormous volume of traffic driving too fast, very often filling all three lanes. We are plagued by drivers who fail to adjust their driving speed and style to changing conditions, be it of weather or traffic volume. Too much traffic stays in the middle and fast lanes, even when there is room in the nearside lane. People, perhaps understandably, refuse to move over into the slow lane or the middle lane for fear of being boxed in. They are tending now to treat the middle lane as a normal progress lane rather than as an overtaking lane. This contributes to sudden traffic build-up and little room for manoeuvre if a dangerous situation arises. It leads to the even worse sin of drivers overtaking on the nearside, which is becoming an even more prevalent practice. Another major problem is that drivers move too rapidly from lane to lane, very often without indication. This can be particularly horrific if, as is sometimes the case, an enormous lorry is involved.
Great efforts have been made in recent years to cope with the problems of the M1 and other motorways. While traffic virtually doubled on motorways between 1973 and 1983, a further 1,000 kilometres of motorway have been constructed. That has not quite doubled the amount of motorway but it has gone some way towards doing so. The number of fatal and serious accidents on motorways per 100 million vehicle kilometres has been reduced and, overall, accident rates on motorways compare well with those on other types of road.
Accidents on the M1 specifically have been reduced since 1979. Yet the accident rates for Northamptonshire and Bedfordshire—the two areas with which I am most concerned—have not fallen so significantly. They have varied considerably, but they are still bad. As my hon. Friend the Minister will be aware, the key factor about a motorway accident is that it is much more horrific than a


trunk road accident because of the domino effect. However, it must be said that motorway accidents occur less frequently than trunk road accidents.
I know that my hon. Friend has taken considerable steps to improve the M1, and I fully acknowledge the achievements of recent years. However, I fear that we shall have to run much harder to avoid a serious build-up of future problems. I should like to make some suggestions for future policy. Improvements to adjacent roads and motorways, such as the A1, have been made and I understand that further steps are planned. For example, the extension to the M40 is under consideration, and I urge that that is undertaken at the earliest opportunity. It may siphon off some traffic from the M1, but I doubt whether it will be sufficient. Although the southern sections of the M1 have only recently been extended to three lanes, we should start giving serious consideration now to widening them to four lanes as soon as possible. We should also consider the development of other alternative routes. Considerable progress is also being made in lighting stretches of the M1. However, I urge that a further impetus be given to that programme. My hon. Friend the Member for Leicester, East (Mr. Bruinvels) will seek to comment on that point.
Television advertising campaigns can be very effective in reinforcing road safety messages and in influencing driver behaviour. I urge my hon. Friend the Minister to undertake such a campaign relating to the specific dangers that I have outlined. Such campaigns have been successful in the past when mounted by the Department and aimed at motor cyclists and cyclists. The police do a marvellous job on the motorway, but more policemen would be welcome. It is remarkable what a sobering effect of the fact that a police car is parked by the side of the motorway has on us.
In adverse conditions advisory speed limits are often ignored. There is surely a good case for making them mandatory, although for that to be effective, the authorities should not be over-cautious and start the restriction too distant from the point of danger. In order to make that effective, means also need to be found for a quicker feedback of information about changing conditions on the motorway.
I come to a relatively minor point that is nevertheless worthy of consideration. Strictly speaking, it is illegal to use hazard warning lights while the vehicle is moving. Nevertheless it is enormously helpful to slowing traffic in difficult situations if such a warning is given. While the police are unlikely to prosecute if people commit such a technical offence, it seems sensible to remove the illegality and to encourage the practice.
There is also the hoary old chestnut about sections of the motorway being cordoned off when little work is going on. One appreciates that cones may well be living entities in their own right, and that they need fresh air in order to breath and breed, so we need to keep them out in the fresh air for fairly long periods. However, there have been great improvements in the past two or three years in taking them back to the cone house at night, or as frequently as possible. But as recently as last Friday, I found a stretch near the Rothersthorpe service station where the motorway was coned off for more than two miles with no sign

whatever of any activity. If there has been activity earlier in the day, it would seem sensible to remove the cones at peak times, even if they have to be returned later.
There is another area in which we are improving a little. I refer to giving more advance notice at the 800-yard rather than at the 600-yard mark of when lanes are to be taken out of action.
I plead with the Minister not to raise the motorway speed limit for cars. For many vehicles, 80 mph on motorways is the de facto speed limit. With improving vehicle performance, an official 80 mph limit would mean a de facto limit of 90 moh. Indeed, raising the speed limit for lorries has had some adverse effects on road safety, although one apreciates the arguments which led the Department to agree to that increase.
I urge the Minister to give serious consideration to a noticeably deteriorating situation, to the need for a television advertsing campaign and to the need — I appreciate that it must be a long-term task—to extend that motorway to four lanes along its southern section at the earliest opportunity.

Mr. Peter Bruinvels: rose—

Mr. Deputy Speaker (Sir Paul Dean): I understand that the hon. Member for Leicester, East (Mr. Bruinvels) has the agreement of the hon. Member for Halifax (Mr. Galley) and the Minister to intervene.

Mr. Bruinvels: I am grateful to my hon. Friend the Member for Halifax (Mr. Galley) for allowing me to take part in this important debate and, as he hinted that I might, to raise the question of lighting up the entire length of the Ml, a motorway that I use every weekend and sometimes more often.
I must at the outset declare an interest in that I am the joint chairman—with the hon. Member for Hamilton (Mr. Robertson)—of the British parliamentary lighting group. Together, in May 1984 we wrote a book entitled, "Light up the Roads", a copy of which is in the Minister's possession and in which we advocated lighting up all the motorways of Britain.
Since being elected in June 1983, I have sought to make motorways, including the M1, safer. At present, we have 1,100 miles of motorway unlit, and only 68 miles of the M1 are currently lit. On 12 December 1984, the Minister told me in a parliamentary answer in column 526 that it would cost £9 million to light up the M1 and £81 million to light up the rest of the motorway system, with maintenance for the whole system costing £9 million a year.
I highlighted the facts in a letter to The Times on 24 December last, but the problems has not gone away. We have had a rough time with the weather recently, with fog and mist, rain and heavy snow. The Minister said on 21 November 1983 that motorway lighting could be expected to reduce the night time accident rate. That is an important point, bearing in mind that each night time fatality is now costing the nation £205,460.
Lives could, therefore, be saved by bringing light to the motorways. In recent years, an average of 206 people a year have died on the motorways. On the M1 in particular there are regular contraflows and lane closures. It is vital that such areas, and junctions, are properly illuminated. As my hon. Friend said, cones get in the way, and at night they may not be seen clearly.
When the M25 junction is functioning at the M1, lighting will be necessary. The road will be narrow at that point and lights will be required. Lights there and throughout the motorway system are necessary to keep motorists fully aware of all road conditions.
I am pleased to learn, following lobbying, that the M1 is to be lit between Newport Pagnell service station and junction 16. This news was well received in the Daily Telegraph and motoring journals, and the move has been encouraging for those campaigning for more lights on motorways. In a parliamentary answer, my hon. Friend the Minister told me:
I am keeping under review the need to provide additional lighting on the remaining unlit stretches of the M1.
—[Official Report 12 December 1984; Vol 69, c. 52.] Not surprisingly, that has given me great hope. It is good news, and I hope that we shall receive some more news—if not tonight, then in the not-too-far-distant future.
Lighting can reduce accidents by 60 per cent., as has been proved. As recently as Tuesday this week, a man from Leicester was killed on the M1. So there is still a problem.
The first report of the Transport Select Committee said:
we recommend the gradual installation of overhead lighting on existing motorways.
I am especially encouraged to know that the Transport Select Committee is in favour of lighting the motorways. The Committee recommended also that all new motorways should have overhead lights. That is marvellous. We should encourage moves to light the rest of the M1. The Department of Transport made a submission stating:
If … there is a serious night accident problem which cannot be solved by other measures then lighting should be considered.
The evidence that the accident rate during the hours of darkness is worse than the rate in daylight cannot be disputed. Is not the time right and is it not worth spending the money now to make the M1 a safer place on which to drive?

The Minister of State, Department of Transport (Mrs. Lynda Chalker): I congratulate my hon. Friend the Member for Halifax (Mr. Galley) on securing this debate. I know that the subject is of great importance to him. Many of us travel up and down the M1 and some other motorways with great regularity. This is a useful opportunity for me to hear hon. Members' views on the M1.
The M1 has had to carry much more and much heavier traffic than was expected when work started on it in the early 1950s under my predecessor the former Member for Wallasey, the late Ernest Marples. This has required successive Administrations to monitor the M1's capacity. Work has been necessary to deal with wear and tear. Roads, like houses, need to be maintained, renovated and extended. It is no good thinking that we shall find some wonder product which means that we shall never have to resurface or repair.
Steps have been taken to increase the capacity of the length of the M1 between junctions 5 and 8 in Hertfordshire, which was the first part of the motorway to be opened in 1959. Under a scheme completed in November 1983 — between these two junctions — the motorway was widened to at least three lanes in each direction. Some surplus land enabled us to provide four lanes northbound between the site of the new M1-M25

junctions, now under construction north of M1 junction 6, and junction 7. Some new overbridges were built of sufficient width to accommodate a fourth lane if this became warranted in the future.
We are seeking to deal in the short term with some capacity problems at junctions. At junction 9 in Hertfordshire and junctions 12 and 13 in Bedfordshire northbound traffic has at times queued back on to the motorway in peak hours. A new roundabout junction is now in operation at junction 13 and, to ease traffic flows from the motorway, we shall be installing peak hour traffic signals at junction 12 this year. At junction 9 we are investigating the use of peak hour signals. Hertfordshire county council is also carrying out junction improvements to ease traffic flows from the motorway on to local roads.
My hon. Friend has suggested that the southern end of the M1 should be wider. While I have sympathy with the difficulties he and other hon. Members encounter, I have to say to him that here, as in relation to the rest of our motorway and trunk road system, we must use our limited resources carefully and build to the standard justified by the traffic volumes. I want to make it quite clear that we do not provide a particular standard of motorway or trunk road just because the route has a particular status.
Public funds for that work are not unlimited. It is important that we get the best value for money. If we were to build four-lane carriageways in places where they cannot be justified in terms of the traffic likely to use them other much-needed schemes would be postponed or forgone. As I have said on many occasions, I am not prepared to do that, but I shall do all that is necessary to try to make our roads safer.
Having said that, I am aware that traffic volumes on some of the southern sections of the M1 are beginning to build up, and we are monitoring that matter carefully. This is particularly true between junctions 7, the M10, and junction 10, Luton South. We hope that the M40 will be able to provide some relief.
There are several good reasons for completing the M40. It will bring relief to the M1 and the choice of an alternative route. There will be operational benefits from that choice during periods of maintenance or other disruptions to traffic, and I am sure that many people will seek to use the alternative route on their way to the north-west.
At the M40 public inquiry, my Department predicted that the M40 will, in normal conditions, attract between 13,000 and 16,000 vehicles per day from the M1 from the date of its opening. Even modest estimates suggest that these figures would rise to a range of 16,000 to 20,000 vehicles per day by the M40's design year of 2004.
My right hon. Friends the Secretaries of State for the Environment and Transport announced their decision on 14 December last to accept the recommendation of the inspector, who held the public inquiry into the proposals, that the new M40 motorway extension should be built.
I hope that my hon. Friend the Member for Halifax will agree that the relief we are seeking to provide by building the M40 will play a significant part in tackling the problems of congestion on the M1 which he has discussed today. The House should, however, be aware that since my right hon. Friends' decision there has been an application to the High Court seeking to have the made scheme quashed. It remains the Government's underlying policy to complete the M40 motorway.
In the corridor to the east of the M1 , the A1 already provides a high standard dual carriageway alternative. With the completion of the scheme currently in progress at Hatfield in early 1987, the A1 will be of motorway standard all the way from its junction with M25 at South Mimms to the Bedfordshire border, and may offer a more attractive alternative than the A1 does at present for certain journeys. That too should help with the traffic on M1.
I agree with what my hon. Friends have said about driver behaviour. I am worried about the deteriorating standards of motorway driving. Most motorway accidents are caused by a minority of drivers who fail to react sensibly to changing road, traffic and weather conditions. However, we must not lose sight of the fact that, in terms of accidents, motorway travel is much safer than travel on other main roads. The accident rate for the M1 is not out of line with the average rate for motorways nationally, but I understand the anxiety about accidents in Northamptonshire and Bedfordshire which my hon. Friend mentioned.
Although the overall performance on motorways is the best of any roads, I accept that any accident is one too many. Offering advice and guidance is straightforward, but it is less easy to persuade road users to act on it responsibly. Our existing media coverage by press, radio and TV fillers is designed to do just that. We are currently running a campaign on motorway lane discipline and 23 million leaflets are being sent out by the Driver and Vehicle Licensing Centre at Swansea with vehicle tax renewal reminders over the 12-month period from May 1984 to April 1985.
My hon. Friend mentioned that he felt that we should have a full scale national publicity campaign on motorway driving. It would be very expensive and not necessarily cost effective. It is vital that we continue to direct our efforts towards road user groups known to be most vulnerable to traffic accidents. Our current campaigns on child pedestrian safety, cyclist safety and against driving after drinking are most important. I am afraid that generalised messages such as "Drive carefully" regrettably tend to be less effective. I assure the House that the Department will continue to co-operate with local initiatives to encourage safe driving. Much good work has been done in that respect, and it continues to be done, mainly by the police. I am sure that my hon. Friend will be glad to know that the police are considering a nationwide motorway safety campaign this year. One of the main points that we keep on trying to press home is that it is only by keeping an adequate distance behind the vehicle in front, sufficient to stop under all weather conditions, that one can be sure of not going into the back of another vehicle when an unexpected hazard arises.
Motorists who are concerned to remain safe on our roads would be well advised to take an advanced driving course and the Institute of Advanced Motorists or ROSPA advanced test, and to keep those qualifications up to date.
My hon. Friend spoke about the motorway speed limit. The raising of the 70 mph limit to 80 mph on motorways was rejected last year because of the likelihood of increased casualties. However, the possibility has been raised again by the Select Committee's report, which we are considering, and I know that my right hon. Friend the Secretary of State for Transport will look carefully at what it says.
My hon. Friend the Member for Halifax also said that he hoped we would consider making mandatory the temporary speed limit signs on motorways, which are currently advisory. I have already said in answer to questions in the House that we are considering that matter at present.
I should like to refer to lighting the M1, which is of such concern to both my hon. Friends, particularly my hon. Friend the Member for Leicester, East (Mr. Bruinvels), who has been unrelenting in his pressure on behalf of safety through lighting on motorways. I think that he knows that we already constantly monitor accident rates on our motorways, and if a serious night-time problem develops on a particular length of road, lighting is automatically considered. A study is made, taking account of the possible accident savings, and capital running costs. I should remind my hon. Friend that I am reviewing road lighting policy following the serious multiple accident on the M25 in December, and in view of the recommendations of the House of Commons Committee on Road Safety in its recent report.
As I told my hon. Friend the Member for Halifax in answer to his question on 14 December, 68 miles of the M1 is lit out of a total length up to junction 43 of 194 miles. A further 16 miles of lighting is to be installed between the Newport Pagnell service area and junction 16, and we hope to complete that work by the end of 1986. The decision to light that stretch was taken in view of the night accident problem. It will fill a gap between stretches already lit and mean that the motorway will be lit from its start to junction 17, which is the junction with the M45, at junctions 19 and 21, and from junctions 24 to 26. The possibility of further lighting will be studied, but we can do the lighting only bit by bit because of the maintenance and cone problem to which my hon. Friend referred.
I have given the go-ahead recently for the installation of closer-spaced matrix signalling at 1 km intervals on 50 miles of the M1 in Bedfordshire and Northamptonshire. We are getting on with that, and I hope that a start can be made on installation early next year. We shall monitor what happens. We hope that that will help to reduce the number of accidents, and we shall be able to evaluate the techniques that we are using for potential future use on other inter-urban motorways.
I should like to refer to reconstruction and maintenance. I was grateful for what my hon. Friend the Member for Halifax said about the improvements. Because of changing the crossovers and various other technical matters where we have to have contraflow systems, travelling has improved. But drivers still drive far too close together, and still ignore the speed advice signs.
I know how annoying it can be sometimes when, having been held up, one sees a length of cones, and apparently no work going on inside the cones. We do not leave cones out to get the sunshine or the moonlight. They are there only when necessary — sometimes for the drying out of the road surface, which, according to the time of year, can take varying times. That is sometimes annoying to the travelling motorist who has been delayed.
This has been a useful and helpful debate. I have taken careful note of what has been said. I hope that I have been able to reassure my hon. Friends—at least partially—and the House that the Government hae an active concern for the needs of travellers on the M1 , and will take their needs fully into account when developing the future strategy for the motorways and, indeed, for greater safety upon them.
Question put and agreed to.
Adjourned accordingly at Two o'clock.